The number of viewings per sale should be used as an indicator for the health of the housing market, a senior agency figure claims.
Adam Day, estate agency growth leader at eXp, has suggested property viewing figures are one of the reasons to still be positive about the housing market despite the current political and economic stability.
Writing exclusively for Estate Agent Today, he said: “One of the other factors I keep an eye on is ‘viewings per sale’. Historically, if this number ranges from eight to 10 viewings per sale, the market is strong.
“Back in 2008, this number crept up to over 14, which occurred in a very short space of time as buyer sentiment was dampened. At the moment, viewings per sale are around 10, which is still strong – but as in 2008, this figure could change quickly.”
Day added that rising interest rates and higher mortgage costs are not solely enough to trigger a housing crash.
He said: “In the more immediate term, higher mortgage repayments will only affect a minority proportion of homeowners.
“As much as 80% of homeowners are on fixed mortgage rates, which is expected to remain the case for at least a year. Buyers should also rest assured that interest rates are still low, even with all the recent Bank of England rises, so borrowing money is still relatively cheap.”
He said the recent Stamp Duty changes should also “soften the blow” of any market volatility and even stimulate the economy in the short term.
Day added: “These cuts neutralise cost rises in other areas, much as it played out when they were introduced previously during the Covid years.
“By no means is this to say the housing market will not be negatively affected by the ongoing circumstances.
“But it is key that we do not shatter confidence during these challenging times, as this in itself could end up being the culprit that sends the market further down in tailspin.
“I for one would encourage anyone looking to buy or sell to do their due diligence and work with a respected agent as opposed to focusing on the current headlines. This way, you can achieve the proper, informed guidance needed to navigate a less certain market.”
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It could have more to do with people cancelling their NETFLIX and wanting to stare at something - so they go online to dream about property.
Without wishing to appear rude, I'm not entirely sure what parallel universe this senior industry figure Adam Day lives in, but here in SW11, this is not the case.
There appear to be in fact according to Rightmove Plus. Here in SW11, in the last month, from a total stock of 980 properties for sale, 164 have had their price reduced (17%). During the same period, 231 new properties have come to the market, while only 86 sales (8%) have been agreed. Of the total number of properties on the market, 645 have been on the market for more than 12 weeks; the actual average length of time is 221 days!
The reason for this situation is quite simple, many of the agents in this area (and I am sure there are many others) are staffed with relatively inexperienced managers and staff. They are bailed out in a rising market when they overprice a property to gain more stock through ever-increasing prices and greater demand. When the market is falling, as it is now, due to, among other things, rising interest rates, this business model sadly does not work.
Overpriced stock is not selling, and sales staff will see their pipelines dry up. Our addiction to cheap money is at an end, many buyers have mortgaged themselves, and when their fixed-rate mortgages come to an end, we will begin to see the cracks really open up.
Correct pricing has never been more critical with rising interest rates, living costs, and taxes. Unfortunately, for many in the industry, this is the first time they will have seen a downturn in the market; for other, more seasoned agents who have seen it before, this is all too familiar.
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