Fear and greed have long been given the honours as the great drivers of the stock market and they’re probably at work in just about any market you can name.
But the real estate market …
The real estate market dances not only to its own drum, but to its own orchestra.
[pullquote]To fear and greed add ignorance and ego…”[/pullquote]To fear and greed add ignorance and ego, avarice (greed underhanded), cunning and common sense.
Most of which was out and about over the past week.
A couple of egos went to a my-wallet-is-bigger-than-yours war in Malvern and the “winner” managed to spend more per square metre than would have bought well in Toorak. Winner last seen on Sunday morning in foetal position under kitchen table?
Fear and greed? Look into the eyes of most (not all) agents while they tell you hand on heart that the market has bottomed and all is rosy for the clever. Look a little deeper and see whether they speak from knowledge or desperation.
Avarice? Avarice is everyday. Common as the Autumn chill. The vendors who insist they have an offer half a mill over the odds and it takes an honest agent (yes, they happen) to tell them to get real.
And the greed is without season. The agents who promise the outrageous so ignorant sellers will give them the work (and advertising budget); sellers who are then left with one pathetic vendor bid when their auction inevitably collapses. The guilty parties? Look for the agents with the greatest number of failed auctions. You won’t have to look far.
The dollar factor? Overseas interest appears again on the rise but is yet to translate into significant activity.
Most optimistic prediction? Good bottle of red. By the fire.
Bayside: April showers?
But May storm clouds gathering.
Following a dismal month in April for Bayside real estate it was obvious that agents and vendors were hanging their collective hat on a resurgent May, particularly on the back of a .5% drop in official interest rates.
But so far not so good; and more so if you are trying to offload a property in the mid to top range.
What little momentum that may have been developing at the top end had stopped dead by the end of March – the only exceptions being those rarely available homes with the lot.
Forgive the following (stats! we’re reduced to stats!) but it’s the clearest snapshot of what has really been happening in Bayside between the end of March and the weekend just passed.
The Brightons. Total reported sales: 62
Highest reported price: $3,255,000 (22 South Road Brighton)
- Average price: $1,250,000
- Median price: $1,180,000
With only six reported sales over $2 million, the top end is near non-existent and the middle range is struggling.
62 sales might seem a reasonable number and, yes, some firms are still writing reasonable numbers. But when one of the leading marketing agencies and a boutique firm at the other end of the food chain each admits to only one sale for all of April, you can almost feel the pain.
Beaumaris/Black Rock. Total reported transactions: 26
Highest reported price: $2,400,000 (424 Beach Road, Beaumaris, early April)
- Average price: $1,016,000
- Median price: $900,000
A smaller catchment area with few sales, but again not much happening in the middle or top end.
Hampton/Sandringham. Total reported transactions: 27
Highest reported sale: $1,780,000 (164 Beach Road, Sandringham)
- Average price: $ 915,000
- Median price: $745,000
Similar story. Most sales in the lower quartiles.
And yes, Easter, school holidays and Anzac day can all be used as reasons (excuses?) which explain why things are struggling, but in reality we are still lost in the forest and can’t escape because of those blasted trees.
If a 50-point interest rate cut doesn’t provide the answer, will the budget tomorrow night do the trick? Hardly.
How about a chainsaw?
The road ahead looks long and the going slow.
End of sermon.
What, then, shook the world over the weekend?
Not a lot.
The Brightons saw a whopping 26 scheduled auctions with three sold prior and 14 selling on the day, although many were passed in and negotiated later.
42 Bay Street was offered with a quote of $2.5 million+ by its new agent following some 12 months under the previous firm, although the expectation was then in excess of $3.5 million. Two bidders competed gently before it was passed in at $2.635 million with a sale being negotiated a little later at a little more. (Although undisclosed word has it was around $2.7 million, almost a cool million less than initially sought.)
A mid-week twilight auction at 51A William Street finally got this one away after a previous campaign with another agent never quite made it. Against a initially hoped-for $2.5 million plus, cooler heads prevailed and a more realistic $2.2 million was accepted.
Of the handful sold prior, 38 Sussex Street is noteworthy.
A good period house in a great street – in terrific condition but still potential to do the big number – an early but realistic offer of $2,525,000 was received within days of it being listed. A combination of sensible expectations and a genuine pre-auction offer was enough to see a sale made. It does help if you are in the know.
10 Kent Avenue in the Golden Mile demonstrated a different trajectory. It began with fruitless gavel-swinging with an off-the-radar expectation of $4.5 million plus. A change of agent and a bite of reality brought that back to hopes of $3 million plus – which did bring two bidders to the party and an offer of $3.3 million. No sale as yet, but it no longer looks like a bridge too far.
Further down the bike path and into Bowie and Black Rock, the songs they sang sounded a lot like the blues.
- 4 Burgess Street, Beaumaris passed in on a vendor bid of $2.2 million, later countered by an offer of $2.15 million – its reserve is $2.3 million.
- 286 Beach Street, Black Rock another triumphant vendor (not) at $1.85 million – its reserve is $1.95 million.
Little heard in Sandringham, but a fair bit of shouting in Crisp Street, Hampton;
- 18 Crisp Street had two bidders and sold for $1,535,000
- 37 Crisp Street had a vendor bid and is now for sale at $1.45 million.
The ever-reliable Bentleighs … weren’t. 14 auctions, 8 sold. Demonstrating again that interest rate relief is not alone enough to allay Fear of Buyer.
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