Sentiment is everything
Imagine....That England have been practising and planning for months to beat the All Blacks and might not be able to change their superbly well grooved and executed game plan in a week to overcome the Springboks. And we win! What would that do for sentiment?
Sentiment-negative home buyers and sellers should take note of a TED Talk* presentation (https://www.ted.com/talks/alison_ledgerwood_a_simple_trick_to_improve_positive_thinking/transcript?language=en) on how a half-empty glass may be a little more full than we thought.
It's all about perception - and it is particularly relevant in the homes market right now...because perception drives sentiment. And positive sentiment has, at best, been flat lining this year. Tito's Medium Term Budget has not helped.
Our minds tend to look for negative information - and then hold on to it, rather than let go. But we can re-train our minds to see that the glass is, in fact, more than half full.
It is unfortunate that the half-empty mindset that has prevailed in the homes market so far this year has caused both buyers and sellers to miss the "sweet spot" transaction period - which is the first couple of months that the property is on the market.
Price right
It is 'fresh' at that point, and people will be not only curious but will also respond. However, you will miss that sweet spot if you are not at the right price.The price is the key to the value proposition. If you haven't got that right, potential buyers simply don't come back.
This particular argument is more relevant in poor, or difficult, market conditions than in a buoyant market - in which pressure can be put on buyers to perform because they know they may miss the boat...and the house will be more expensive six months later.
Conversely, buyers drag their heels in a difficult market because they know that 'more is nog a dag' . So they don't respond.
If, as a seller, you finally relent and come down in price after, say, 8 or 12 weeks, you will be at the thin edge of the wedge - because people who liked the property originally cannot easily be brought back in.
Agents under pressure
Meanwhile, residential estate agents are being put under pressure to overprice properties for sale when they are aware that other agents have been called in as well. And this trend causes properties to stick.
Ideally, sellers need to keep their feet on the ground and price their properties conservatively and accurately. Remembering, in this market everyone settles on a point of slight discomfort.
Is it not much more pragmatic to diminish the importance of the history and, instead, look forward to new prospects - albeit that they will be developed off a lower base?