Could it just be possible that predicting a homes price is not science?
If human emotion is involved, then definitely no, it’s surely not a science.
How powerful can human emotion be?
Human emotion is that thing that makes a person, even though they know they will go to jail, go and commit a heinous crime.
Human emotion is that thing that completely overides logic and makes someone buy something, when in the light of the next day, they ask themselves “did I really buy that?”
Human emotion is certainly the number one thing TV advertisers target, logic way behind.
Human emotion is known as the major factor in the purchase of products. People buy emotionally not logically.
In the old days, before wide angle lens on cameras were commonplace, a chap from England told me that when he was selling homes, he too was stunned by the effect a certain property had when standing with both prospective buyers in the kitchen and surveying the backyard, he commented (& highlighted) the flowering cherry tree…..and at that time just happened to be looking at one of the partners – whose eyes lit up when he said what he did.
Now tell me logic mattered here?
Incidentally they did buy the property, and in his words he thought that was the “moment” that his buyers transcended from lookers to on-the-spot buyers. Emotion…..hmmmmm.
Back to the topic……it would seem on the face of it, from preliminary data submitted to date to REINZ that our region did indeed have a good September in regards to sales.
Numbers of sales were definitely up, pity the number of new listings couldn’t and still hasn’t kept pace with that increased sell-through.
As a matter of fact it’s probably the first “all green” up/down chart I’ve seen in about a year.
As a timely example, let’s look at some Sept 09 confirmed sales to see how they stack up;
Ridgeway Stoke 4 bed CV $295,000 SOLD for $395,000 127% of CV
Grove St The Wood 3 bed CV $410,000 SOLD for $380,000 93% of CV
Keats Ave Stoke 3 bed CV $270,000 SOLD for $350,000 130% of CV
Keats Ave Stoke 3 bed CV $290,000 SOLD for $355,000 123% of CV
Winton Pl Atawhai 2 bed CV $225,000 SOLD for $285,000 127% of CV
Stansell Ave Moana 2 bed CV$480,000 SOLD for $450,000 94% of CV
See….it’s not a science…… there really are just too many factors to consider, and talk about variances?
Eagle eyes amongst you will note that 2 of the above properties didn’t reach their CV figure when sold.
Just to allay your concerns that a trend is appearing, these 2 were from a group of 3 properties out of 83 Sold that were below CV.
Of interest too is the free Home Value Tracker report you can run over at QV to check for yourself (free offer expires 25th Oct 09)
Keats Ave Stoke CV $270,000 SOLD for $350,000 310,000
Keats Ave Stoke CV $290,000 SOLD for $355,000 360,000
Stansell Ave Moana CV$480,000 SOLD for $450,000 460,000
The figures on the far right column are the ones reported back by that home value tracker. The other 3 properties above, The Ridgeway, Grove & Winton don’t return a home tracker value.
However if you want to look at local Nelson Sept 09 medians, then a picture does start to emerge.
2 bedroom properties SOLD at 111% of CV (median of 20 properties sold)
3 bedroom properties SOLD at 113% of CV (median of 43 properties sold)
4 bedroom properties SOLD at 113% of CV (median of 14 properties sold)
5 + bedroom properties SOLD at 121% of CV (median of 6 properties sold)
What does it mean?
Well if you are going to offer less than 10% over CV for a property in Nelson, then unless it’s a mortgagee sale (& they are 99.9% auction anyway) I think here & now you can guess your odds for success.
Placing the Real Estate Agents hat on here, what does it mean that if you want to have a go yourself, how will you fare?
Candidly for sure anyone can attempt to sell it themselves and have a go at trying to get a property sold.
So therefore would you, based on these figures, ask 5, 10, 15, 20, 25, 30% above CV?
To be sure, everyone loves the thought of achieving 25-30% above CV, but no one through the first 2 Open Homes also isn’t exactly a sign a joy.
It brings us back to that human emotion thing again. There are as many different buyers out there, as there are properties for sale or just coming to market. Trying to get that exact match up is whats its all about.
Even if you did sell privately, can you sit down the next day and honestly ask yourself – did you manage to expose the property to every single potential buyer out there, here and overseas, and can you really say with 100% certainty that you actually got the best price?