The state of the market now – very much a sellers’ market – has prompted me to look back to 2010 and the years since to see if we can draw any conclusions.
The market has certainly changed since 2010. Back then the market was sluggish, multiple offers were rare and unconditional offers rarer still – a contrast to the tough conditions facing buyers today. In May 2010 there were just 154 sales in Dunedin compared with 200 this May. Notably, 106 of the May 2010 sales were at $300,000 or less and the median sale price was $241,250. There were only 23 sales over $400,000, realestate.co.nz had 851 Dunedin listings and median days to sell was 44.
Compare that with May 2017. The number of listings (388) on realestate.co.nz is less than half that of May 2010 or even that of May 2015 when there were 840 listings. In May 2017 median days on the market was 22 and the median sale price $355,000. So what’s ahead?
The market tends to slow as we head into winter. Sellers tend to hibernate and buyers become frustrated with the lack of listings. Many vendors believe spring and summer are the best months to sell. Ironically, though, some of the best results are obtained in winter – a time when listing numbers are low and buyers are often still active. It is no secret that the market is influenced by supply and demand. When supply is short and demand is strong, prices rise.
In contrast to May 2010, nothing could be more true right now – a record low number of listings and, through a variety of influences, still very strong buyer demand, especially in the price range to $400,000. For the past 18 months, as listings have fallen, prices in Dunedin have steadily risen. From May 2015, the median sale price has climbed from $284,000 to $307,000 last May to $355,000 this May. So, if you are contemplating selling and your home is well prepared and warm, the months before the spring influx of new listings can be rewarding. I have heard many buyers say they prefer to look in winter. If they like a property then, they are bound to love it in summer.
And for buyers, though the number of listings is relatively small, competition fierce and it might be tempting to wait till spring, against that is the tide of rising prices. The longer you wait in this market, the more you are likely to pay.