Vendors Risk Low Return On Home Investment In White Hot Real Estate Market
While Hamilton’s housing market is booming, Lodge Real Estate Managing Director Jeremy O’Rourke says some vendors are still not getting the best price possible for their property investment.
“Our local housing market is white hot. Stocks are low and demand is high, which means offers from buyers are coming in very quickly on quality properties.
“In this sort of market it is tempting for vendors to take the first offer that meets their expectations. But a quick sale isn’t always a successful sale.
“For many people, your home is your most valuable investment. No matter what market you sell in, you need to maximise the return on that investment. Practising patience while having a good strategy planned before you even list your home on the market is the key,” explains O’Rourke.
Mr O’Rourke has been in the real estate profession for 23 years. He says he and his colleagues who have served similar tenures have never seen a stronger market than what is happening currently.
“As agents, we remember some of the most frenetic, strong markets such as in 1996 to 1997 and again in 2004 to 2005. But today’s market is at a whole different level again.
“So, it’s surprising to still see some properties being sold under their true values. When we look closer at these cases, it’s usually apparent that there were no processes in place that put buyers in competition and maximised the number of views to gain multiple offers.
“Selling a home in this market is not difficult, but maximising the return on your home investment in this market is an art,” says O’Rourke.
On 11 September, the Real Estate Institute of New Zealand released its August figures showing Hamilton achieved a record median sales price of $652,500 last month.
July 2020 was the first time ever that the number of homes sold at $1 million or more accounted for over 10% of total market sales.
Mr O’Rourke says that the way vendors sold a home in January this year is completely different to how they need to sell now.
“Most of us drastically changed our media consumption behaviours during lockdown, and that’s caused the real estate industry to have to completely change the way we market homes for our clients.
“Lodge for one has all but abandoned newspaper advertising. We are finding online sales channels can get our clients’ homes in front of thousands of eager buyers in literally days. Digital strategy is a much better use of a vendor’s limited marketing dollar,” he says.
Mr O’Rourke cautioned buyers that higher prices were likely to be seen in coming months in Hamilton.
“As vendors begin to see the value of having patience and working a smart sales strategy, prices will be pushed higher over the next few months.
“The all-time low interest rates, in particular, are helping shield many buyers from the worst of the price pressures.”