Sales figures, says Wayne Albutt, the Rawson Property Group’s Regional Sales Manager for the Western Cape, can frequently be interpreted in different ways – and this is especially true on the thorny subject of the current so-called ‘stock shortages’ which many agents now list as their most serious problem.
To illustrate the point he wishes to make, Albutt mentioned that in January this year the Rawson Property Group sold 33% more housing units than in January 2014 at a resultant value of 50% more. In February, the comparative figures were up 38% on unit sales and 57% in value.
“Looking at big increases of this kind,” said Albutt, “it is very easy to conclude that the estate agency sector is bound to be seriously held back by stock shortages – and certain agents have, in fact, used this as an explanation for falling behind the targets set by them.”
But, he said, interpreting these and similar figures in this way, as virtually every major estate agency in the country is now doing, is in fact to dodge reality – for the simple reason that the number of units sold continues to increase week by week and as yet has shown no sign of tapering off. The serious ‘stock shortages’ so often mentioned cannot be that serious if any good agency can improve its monthly unit sales by 30% plus.”
The reason for the good figures, said Albutt, is that good agencies are selling their client’s homes faster than before.
“A typical estate agency staffed with five agents and operating in market conditions typical of those of two years ago (when a correctly priced property would sell within four months),” says Albutt, “would usually have around 80 homes on their stock list. Today correctly priced properties are selling at a faster rate — usually in less than three weeks. If the supply of homes (willing sellers) has not changed then that same agency would now be sitting with 10 properties rather than 80.”
“In the current situation,” he says, “it seems as though there is a stock shortage when, in reality, the number of willing sellers has not changed. The actual effect has been caused by a marginally (15%) higher demand from buyers which has caused buyer urgency to rise disproportionately. The disadvantage is that this misperception skews real estate’s short term value. In stock market terms this will result in a future crash or a rectification. Therefore, in my opinion, current stock availability skews the perception of supply versus demand in favour of the seller with short to medium term disadvantages to the buyer.”
A recent Facebook quote here seems very apt and is always applicable regardless of market conditions; “The house that you saw today and are thinking about buying tomorrow is the same house that someone else saw yesterday and is thinking about buying today.”
For further information contact Wayne Albutt on (021) 658 7100.
