Is the market crashing? It’s the question on every homeowner's mind as house prices drop from the 2022 peak.
With house prices dropping around the country, a lot of homeowners are feeling uneasy. How will this affect your property? Can you still sell your home? Will you lose money?
We answer all of these questions and more in this article so you can navigate changing market conditions. We explain what a cooling market is, how it could affect you, and how to sell a home even when demand is down.
What is a cooling market?
In the real estate industry, a ‘cooling market’ is when demand for homes or properties decreases. With fewer buyers, current listings stay on the market longer and, as new listings are added daily, the turnover of sales naturally slows down.
A cooling market can be triggered by a range of factors, including increasing interest rates, an economic downturn, or a surplus of listed properties. In these situations, vendors may need to lower their asking prices to attract buyer competition.
Selling in a cooling market can be challenging but it shouldn’t put you off. It can take longer for homes to sell in a cooling market because buyers have more bargaining power and time to consider. However, with the right strategy, you can still have a successful sale - just make sure you're open to negotiation.
The 2023 property market NZ
The record prices in 2022 were unusually high – largely due to the pandemic and record low interest rates. However, as we return to a sense of normality, demand is stabilising. That means the market is cooling, with fewer active buyers and fewer sales.
In 2023, the cooling trend is expected to continue for some time to come. Fortunately, prices are still well above pre-pandemic levels so most vendors are still in a profitable position. Generally, the only thing that drops is the percentage increase in prices, not the prices themselves.
5 tips for selling a home in a cooling market
So you may be wondering – is now a bad time to sell? Despite the dip in the market, the answer comes down to your current situation.
For example, if you’re planning to buy another property once you’ve sold this one, you’re selling and buying in the same market. Our advice is to sell your property when it’s right for you. This will be different for everyone and shouldn’t be dictated by the overall market.
If you are ready to sell, an effective strategy will help you to attract the offers you need. Below are our top five tips to maximise your selling price in a cooling market.
1. Price your home accurately
No matter what the market does, pricing your home correctly is critical. Firstly, take a look at the recent sales in your area, particularly those similar to your own to get a rough idea of how much your property is worth in comparison. Then, get a property appraisal from a local real estate professional who understands the current demand for properties like yours.
Particularly during a cooling market, buyers have a lot of options so they're unlikely to express interest in an overpriced property. If this means the home lingers on the market, you will receive a lower final price when it does finally sell. A professional appraisal will help you to avoid this, ensuring the price is right from the start.
2. Prepare the home for the buyer
When there are fewer active buyers, those that are interested have an opportunity to compare different homes and take note of any potential drawbacks. One of the best ways to attract them is by making sure the property is ready for the buyer to move in.
For example, this could include completing repairs, upgrading fixtures, redecorating, or landscaping. When they have choices, buyers generally opt for the property that requires little to no work on their part. Therefore, doing these jobs for them can significantly increase your chance of a sale.
3. Stage your home
While a hot market forces buyers to move quickly, a cooling market gives them time to shop around. If you want your property to stick in their minds, styling it makes all the difference.
Effective ways to stage your home include cleaning, putting flowers in a vase, hanging art, or even hiring a professional staging service. You’d be surprised how positively buyers will respond!
With just a few cosmetic changes and minor adjustments to the interior decor, you can instantly uplift the visual appeal of the house. When buyers visit the open home, they’re more likely to visualise it as their new home.
4. Invest in marketing
By investing in social media ads, video, photography, and print marketing, you can make sure the right people see your listing. A high-quality marketing campaign will put your property at the forefront of buyers’ minds and, if you can capture their attention, they’re more likely to make an offer.
Most professional real estate companies will also list your property on their website. This is one of the most effective ways to target buyers who are actively looking for something to buy. For example, you can see our current residential listings here.
5. Choose a trusted real estate agent
It’s easy to sell when the market is hot but, when demand drops, you need a skilled real estate agent to guide you. Getting a premium price during this time requires experience, industry expertise, and a strong reputation among buyers. Before choosing your agent, ask friends for recommendations and check online reviews.
To narrow it down, we also recommend comparing their interpersonal skills, sales records, market knowledge, networks, and marketing packages.
Why choose McDonald Real Estate?
If you are selling a home in Taranaki, the McDonald Real Estate team can help. We’re committed to giving you a seamless experience throughout the sales process, using our local expertise to attract the right buyers. Benefits of working with us include:
- Free appraisals.
- An established network of active buyers.
- Effective marketing packages.
- Community values.
- Offices in 8 Taranaki locations.
- More than 110 years of local experience.
