WHAT YOU NEED TO KNOW ABOUT A BUYERS MARKET!

These cycles of a property market are always either skewed in favour of the seller or the buyer. At present, a very entrenched buyers market is in existence in the South African Property Market and has been for the past 2 years.

The typical features of a ‘buyer’s market’ are : an increase in the number of properties being listed ; an increase in the urgency of many of those sellers to sell; a decrease in the number of buyers in the market; a lack of competition in the market; a lowering of listing prices and a tendency for properties to sell below the listing price. In a buyers market, the property market tends to become saturated with properties for sale and properties can remain on the market for extended periods without selling.

If you are a buyer, you need to take advantage of the buyer market scenario…even though it may appear to you that no-one is buying! You are right..not many people are buying and that is why this is your best chance at getting a property for a reduced price and thereby see a good and quick escalation in the value of that property ,once the market recovers. A buyer is king in this kind of market.!  He/she has many properties to choose from and this fact provides the  leverage a buyer can use in negotiating a purchase price to suit the buyer.

If you are a seller, you need to take these set of circumstances very seriously – because you cannot beat them. To over-price in  a buyers market, is like trying to win a race with your legs tied together! Your over-priced property  will merely help the other comparable and more keenly priced properties, to sell as it will make the other properties look like excellent value for money! You need to be prepared to negotiate in this kind of market, knowing that a sale now at a reduced price, is better than no sale at all. Most of all you want to avoid your property being on the market for a long period of time. The danger is that it will become shop-soiled and stale, it will be avoided by buyers and agents and even when you slash the price in order to achieve the sale you now so desperately need, it will not sell. In a buyers market, If you don’t need to sell , don’t sell.

In 2011 in Cape St Francis, the buyers market seems to be as entrenched as in 2009. Over 70% of the listed properties, both undeveloped and developed, have been on the market for over 12 months; sales are taking place at between 13 and 15% of the listed price and generally these sales are on properties priced at market related prices and listed  less than 3 months before the sales. Whereas at the peak of the sellers market in the early years of 2000, no more than 10 properties – both developed and undeveloped, were listed, at present over 30 properties are on the market.