In the current housing market scenario, Rightmove reports a notable 1.7% decline in the asking prices of homes entering the market this month compared to October. This dip, although in line with the usual seasonal trends observed in November, stands out as the most substantial decrease in the past five years.
This data suggests a growing trend among new sellers who are adopting a pragmatic approach by setting more realistic price expectations right from the initial stages of marketing, possibly with the aim of enticing prospective buyers to take prompt action.
Tim Bannister, a housing expert at Rightmove, observes a consistent pattern of a decline in new seller asking prices during the final months of the year. This period is typically characterized by serious sellers aiming to distinguish themselves from those selling on a discretionary basis. The conventional strategy involves cutting through the Christmas noise with an attractive price to secure a buyer.
However, the larger-than-usual drop in asking prices this month signifies a departure from the expected seasonal trend. It suggests a noteworthy shift, indicating that an increasing number of new sellers are heeding their agents’ counsel. They are choosing to enter the market with more enticing prices, a strategic move aimed at standing out in a market where competitors often adopt over-optimistic pricing strategies. This adjustment reflects a pragmatic approach by sellers in response to market dynamics, emphasizing the importance of realistic pricing for successful property transactions.
The current market dynamics indicate that although potential buyers are still active, their affordability has been significantly impacted by increased mortgage rates. A growing realization among sellers is apparent, acknowledging the findings from Rightmove’s research. The data suggests that the probability of securing a buyer is considerably higher when properties are initially priced right, as opposed to the common practice of overpricing and subsequently reducing the price.
Tim Bannister notes that the year-to-date performance has surpassed expectations, offering a more stable trajectory compared to the exceptionally high and competitive pricing observed during the pandemic. The adjustment in asking prices reflects a departure from the unsustainable peaks witnessed in the market, particularly during the period marked by numerous sales going to best and final bids. This shift highlights a pragmatic approach by sellers to align with the current economic landscape and enhance the chances of successful transactions.
The recent drop in new seller asking prices, now only three percent lower than May’s peak, indicates a relatively modest decline. This, combined with a consistent influx of new properties entering the market monthly, suggests that forced sales are not widespread. Although the number of sales being agreed is currently 10 percent below the same period in 2019, it marks an improvement from the 15 percent deficit observed last month.
Rightmove observes that the stock shortage induced by the pandemic seems to have subsided, with the current number of available homes for sale trailing only one percent behind figures from the same period in 2019. While there isn’t an excess of homes for sale, potential buyers nationwide can anticipate a more diversified selection in their local areas compared to a year ago.