Lots going on with me professionally at the moment, so please forgive if this blog post is leaner than most; I’m told that brevity is the soul of wit – so let’s go along with that, shall we?
There’s been quite a bit to digest in the world of real estate news in the last six months… and that’s putting it mildly.
On the face of it, given the headlines, it would be very easy to assume that all aspects of the residential market would be affected equally. However, this is an oversimplification and inaccurate if applied to every neighbourhood, type of property and price bracket. Understanding niches is essential.
Permit me to explain.
An analogous example.
I’m a Registered Nurse, too. Some find this surprising. Regardless, taking the clinical example of schizophrenia (just hang on a minute… I’ll get back to real estate in a second, you’ll see), most people don’t realize that there are several different types of this mental illness (i.e.: paranoid, hebephrenic, catatonic, undifferentiated, residual, simple and unspecified). As a result, they make the mistake of not distinguishing between these types and painting everyone with the same brush – when doing so is completely wrong and unhelpful in terms of prescribing and delivering optimal treatment.
… and so it is, analogously speaking, with differentiating between different types of properties, locations and price brackets; not all are affected equally during the same period of time, under the market influences of the time.
For example, the demand and resulting supply of two different properties may vary wildly.
If you didn’t know any better, the data at the moment are showing that the average number of days a property is for sale on the market has increased. Supply has increased. Prices have dropped accordingly. Overall, this makes good sense.
But it isn’t true for all properties.
Doesn’t the news tell us that there’s lots of inventory — many properties up for sale?!
Yes. And no.
For example, I am working with multiple prospective buyers who are just waiting for any property to come to market; literally, they are witnessing a dire lack of inventory.
WHAT?! Yes, that’s correct. They can’t find a single property for sale for the type that they seek.
Just goes to show that certain types of properties’ demand can be inelastic – so consistent as to be resilient and unaffected by external market forces. Economics 101.
What chance does a prospective buyer have to purchase such a scarce type of property?
Hate to say it, but one of the value-adds a Realtor provides (not often evident at first) is their network; do they know of any properties coming up for sale (not yet on the market)? Do they know of anyone who might consider selling? Do they know of any conditional deals that might fall through?
Sometimes who you know – and work with – matters just as much as what they know.
… but you probably already knew that.