Great(er) Expectations: Why Tamworth Home Sellers are Having to Reduce Their Asking Prices by an Average of £11,600 Each

As we head for the winter months, some interesting statistics have come to light on the Tamworth Property Market which will be thought provoking for both homeowners and buy to let landlords alike.

Over the last 12 months 1,190 households have changed hands in Tamworth, interesting when compared with the 10-year average of 1,128 households per year.

Overcooked house prices

 

Yet, for the purpose of this week’s article, I want to discuss the pricing of the current crop of Tamworth’s property sellers and the prices they are asking for their homes and the prices they are achieving (or not as at the case may be). It is so important for all property owners to know the real story, so they can judge for themselves where they stand in the current Tamworth housing market, thus enabling them to make suitable and informed decisions… and that is why, in my blog about the Tamworth Property Market, I pride myself in telling the people of Tamworth the real answers, not just the ones they want to hear.

The national average of homes selling at or above the asking price currently stands at around 10%, so around 90% go below the asking price – but by how much? Well according to Rightmove, in the Tamworth area, the average difference between the ‘FINAL asking price’ to the price agreed is 2.5% … yet note I highlighted the word FINAL in the last statement.

You see some Estate Agents will deliberately over inflate the suggested initial asking price to the house seller, because it gives them a greater chance to secure the property on that agent’s books, as opposed to a competitor. This practice is called overvaluing. Now of course, each homeowner wants to get the most for their property, it is quite often their biggest asset – yet some agents know this and prey on those house sellers. You might ask, what is the issue with that?

Well, you only get one chance of hitting the market as a new property. Everyone has access to the internet, Rightmove and Zoopla etc, and your potential buyers will know the market like the back of their hand. If you have a 3 bed semi that is on the market for a 3 bed detached house price.. those buyers will ignore you.

If your Tamworth property sticks on the market, potential buyers will keep seeing your Tamworth property on Rightmove each week, then start to think there is something wrong with it, dismiss it even further, until you, as the house seller have to reduce the asking price so much (to make it appear inexpensive) to get it away. According to our own research, the average house buyer only views between 4 and 5 houses before buying – so don’t assume viewers will come round your optimistically priced (i.e. overvalued) property, thinking they will knock you down – no quite the opposite!

So how widespread is overvaluing in Tamworth? The results might surprise you …

32.8% of properties in Tamworth, currently on the market, have reduced their asking price by an average reduction of 4.8% (which equates to £11,600 each)

So, all I ask is this.. be realistic and you will sell at a decent price to a decent buyer. First time – every time – enabling you to move on to the next chapter of your life.

Happy House Hunting.

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The Tamworth House Price Index: 127.82

I had the most interesting conversation the other day with a local Tamworth accountant, who asked me about my articles on the Tamworth property market. It was quite humbling to be given praise by such a professional, when he commented enthusiastically on the articles I write. He was particularly interested with the graphs, facts and figures contained within them – so much so he recommended his clients read them, as most of them were either Tamworth homeowners, Tamworth landlords and a lot of the time – both. However, one question that kept me on my toes was, “With so many House-Price-Indices, how do you know which one to use and how can you calculate what is exactly happening in Tamworth?

To start with, there are indeed a great number of these Indices, including the Land Registry, Office of National Stats, Halifax, Nationwide and LSL to name but a few. The issue occurs when these different house price indices give diverse pictures of the state of the UK housing market. Whilst some indices measure the average value of every property in the UK (sold or unsold), others measure the average ‘price-paid’ of houses that happen to be sold over a fixed time scale… confusing isn’t it!

A lot of the variance between house price indices occurs because of the distinctive ways in which the numerous indices endeavour to beat these issues. You see, the biggest problem in creating a house-price-index when comparing and contrasting with most other indexes (e.g. inflation where the price a ubiquitous tin of Beans can easily be measured over the months and years), is every home is unique and as Tamworth people are only moving every 20 years, it appears the only thing that can be measured is the price of property sold in a given month.

By their very nature, all of the indices are only able to paint a picture of the whole of the UK or, at best, the regional housing market. As I have said many times in my articles on the Tamworth property market, it is important to look to the medium term when considering house price inflation/deflation. Looking at the month-to-month jumps, many indices look like one of those jumpy lie-detector needles you see in the cold war movies!

I can guarantee you in the coming few months, on a month-by-month basis, one or more of the indices will say property prices will have dropped. Let me tell you, no property market indices are representative of the housing market in the short term. Many indices have shown a drop around the Christmas and New Year months, even the boom years of 2001 to 2007 and 2013 to 2015.

So, back to the question, how do we work out what is happening in the Tamworth Property Market and can there be a Tamworth House Price Index?

To calculate what I consider is a fair and proper House Price Index for Tamworth, I initially needed to decide on a starting place for the index. I have chosen 2008 as far enough away, but still gives us a medium/long term view. Next, I split all the house sales into their types (Detached/Semi/House /Apartment) to give us an indication of what is actually selling by postcode district. So, for example, below is a table for the B77 postcode district (the sample shows 2008, 2016 and 2017.

  2008 2016 Proj 2017
Detached 23.0% 26.9% 27.1%
Semi Det 41.9% 40.6% 41.3%
Terraced 29.2% 26.7% 26.1%
Apartment 6.0% 5.8% 5.5%

Then I look at the actual numbers of properties sold in the B77 postcode district. Below is the graph with the numbers for the years already mentioned.

Next, I have looked at the prices paid for those types for every year since 2008, again in this example using the sample years of 2008, 2016 and 2017 for the B77 postcode.

Finally, I amalgamated the same data points for the other postcode districts covered by Tamworth and the surrounding villages, weighted it accordingly, to produce the Tamworth House Price Index … which after all that work, currently stands at for Q4 2017 at 127.82 (Q4 2008 = 100).

I hope you found that of interest and over the coming months and seasons, I shall refer back to Tamworth House Price Index in my Tamworth Property Blog www.tamworthpropertyblog.co.uk to give you a flavour of what is really happening in the Tamworth Property Market.

If you enjoyed reading my article, feel free to take a look my other online resources below:

Hall and Thompson Estate Agents Tamworth Youtube Channelhttps://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

Follow The Buy-To-Let Property Investment Market in Tamworth https://www.tamworthpropertyblog.co.uk

Lorraine’s Tamworth Property Market LinkedIn Page https://www.linkedin.com/in/lorrainethompson2/

Hall and Thompson Estate Agents Tamworth Facebook Page https://www.facebook.com/Hallandthompsonestateagents/

Tamworth Hall and Thompson Estate Agents Twitter Page  https://twitter.com/hallandthompson