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Some quite conflicting indicators emerged from the mortgage lending figures this week causing uncertainty as to the short term direction of home prices and the prospect for owners achieving a Quick Property Sale. On the one hand the quantity of mortgages granted was up once more to 45,000, however the actual amount of money lent was slightly lower. But what does this mean if I need to Sell my Property Fast?
The explanation seems to be that the deposits insisted upon by lenders, many insisting upon 25%, linked with the recent declines in home values has brought about a reduction in the volume of money lent in spite of an increase in transaction numbers. If that is the situation then the present buoyancy about the bottoming out of home prices does appear justified, even though it’s still not the ideal situation to Sell House Fast.
Another explanation may be what may be referred to as the “bargain buyer” effect. Once there is a general feeling that home values have reached the bottom, purchasers are attracted back into the market to pick up what they believe to be bargains. Some of these could be investors or cash purchasers who don’t need a mortgage. In other words there could be a significant number of home sale transactions which simply are not reflecting in the mortgage approvals data.
These bargain hunters will by nature seek out the best priced residential property in given areas, looking more for value than desirability. They will also negotiate hard with sellers to get the best possible deal. The effect of this is that lots of the lowest priced residential properties will be taken out of the market, perhaps in a very short period of time and purchasers coming along in a few months time may be faced with a likely result is that in a few months time the stock of homes for sale will be made up of more of the obstinate sellers, those who resolved not to drop selling prices in order to “Sell my Property Fast”, but who rather stuck to their guns and resolved to wait out the present market problems.
This may be evident in a short term upward spike in home values followed by the much talked about regular increase in step with inflation.
In any event the activity levels do now seem to clearly point in the direction of a stabilised property market. The feeling is that bargain hunters will now have to move in quickly before a price recovery starts in earnest. Owners will also begin to be bullish about their chances of getting good asking prices and will be more likely to turn away very low offers, even if they offer the prospect of a Quick House Sale.
As with any market; values are controlled by supply and demand. As these levels realign there can now be said to be clear indicators that the valuation falls are over and that the market has at least stabilised.