In this December 2007 newsletter we look at:

1. A BUYERS’ OR SELLERS’ MARKET – The signs are there, everywhere
2. Q & A WITH RONALD ENNIK – The Buyers vs. Sellers’ Market debate
3. FAMILY HOLIDAY RENTALS around South Africa – A Choice of Beautiful Getaways
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What are Buyers’ and Sellers’ Property Markets?
When most people decide to sell or buy a home, very few stop to take the temperature of the marketplace or wonder if the market is conducive to the goals at hand. That's because most people tend to think of their home as a place to live and not as an investment.

Buyers’ Property Markets
If you are a buyer looking to a purchase a home in a buyers’ property market, this is the best financial market in which to buy. Why? Because there are more homes available for sale than buyers’ to purchase them. Buyers’ have more homes to choose among, which increases the odds a buyer will find that perfect home.

In a cold property market, serious sellers’ are often willing to negotiate. This means you can probably buy a home for less than list price, and the seller might be willing to pay some or all of your closing costs.

Signs of a Buyers’ Market • Inventory is high as compared to previous months / years. • More than six months of inventory is on the market. • Comparable sale prices are higher than active listing prices. • Fewer buyers’ are purchasing, resulting in lower closed sale numbers. • Median sales prices are declining. • Property ads are getting bigger. • For Sale signs are staying up longer, resulting in longer DOM (days on market)

Sellers’ Property Markets
If you are a homeowner who wants to sell a house in a sellers’ property market, this is the best financial market in which to sell. Why? Because there are more buyers’ than available houses to buy.

In a hot property market, serious buyers’ are often willing to pay more than list price. This means you can probably sell your home quickly and quite possibly for more than you ask for it.

Signs of a Sellers’ Market • Inventory is very low as compared to previous months / years. • More than six months of inventory is on the market. • Comparable sale prices are lower than active listing prices. • More buyers’ are purchasing, resulting in higher closed sale numbers. • Median sales prices are increasing. • Property ads are getting smaller. • For Sale signs are up for a few days before a pending or sold sign is attached.

Neutral Property Markets
These markets are balanced. Typically, interest rates are affordable and the number of buyers’ and sellers’ in the marketplace are equalized. The scales don't tip in either direction, meaning the market is normal without experiencing volatile swings.

Signs of a Neutral Market • Inventory is normal as compared to previous normal months / years.   • Two to four months of inventory is on the market. • Comparable sale prices are close to active listing prices. • Sales numbers have stabilized.   • Median sales prices are flattened.  • Property advertising remains uniform.   • For Sale signs are replaced with pending or sold signs within 30 to 45 days.

Q&A WITH RONALD ENNIK MD Pam Golding Properties (Gauteng) BUYERS’ vs. SELLERS’ MARKET? Ronald Ennik explains... When is it a buyers’ market? A buyers’ market is when, in real terms, property prices are coming down, and there is an over supply of stock and a great shortage of buyers’.   When is it a sellers’ market? A sellers’ market is where house prices are appreciating positively, in real terms, and there is a shortage of stock – this being property for sale.   What are the definite market indicators that determine that it is either a buyers’ or sellers’ market? If it were a buyers’ market you’d have extremely low attendance at show days, if any attendance at all. There was a time at the end of 1997 when there were no people visiting show houses and there was an oversupply of stock. The main indicator for a sellers’ market is property prices appreciating, as it is only demand that causes prices to go up, which then results in buyers’ competing for property and yes, if that frequently happens, that’s an indication of a sellers’ market.   Do all estate agents ‘understand’ these market changes at relatively the same time and react accordingly so that the property market, as a whole, works in unison? No. I would say that different property companies experience the various markets in different ways and it has something to do with their methodology. So some property companies might be battling and it may be because of the way they go about things, when other companies are doing well. There is no consistency really, unless the indicators are overwhelming, then everyone agrees. Overwhelming would be like prices plummeting or rocketing, as in 2004, when prices rose to 35% per annum.   Is there a ‘tool’ of sorts that is industry standard that determines when these markets change or could be changing? No, not that I’m aware of and a point we need to make here is that the reference to buyers’ and sellers’ market is a very loose term as there is no official frame of reference. It’s not like explaining a mortgage. There are no recognized parameters to reference markets to.   How is this information transferred to property owners – the buyers’ and the sellers’? It’s more of a trend, or a description to describe a trend, and so buyers’ and sellers’, as they become more informed, will understand whether the trend is indicating if prices are going up or going down – it’s unlikely that prices go down – you need a catastrophic event to drive prices down. Buyers’ markets are very few and far between.   Presently, are we in a buyers’ or sellers’ market? We are definitely in a sellers’ market. We are just not in the same boom market that we were a few years ago. The rate of price increases has slowed, but prices are still increasing.   How do you know? All the statistics and bank indices are showing that prices are still going up, at a rate somewhere between 8% and 15%, depending on price category and area.   Are there any definitive ‘scenarios’ that can forcibly change the market from a buyers’ to a sellers’, or vice versa? There are a number of scenarios. Each one on its own, I don’t believe, could change it from sellers’ to buyers’ market. However, a combination of these scenarios might be able to do it. These scenarios include the rand dollar exchange rate; the price of oil; the political landscape over the next few months, up to and including the presidential election; the world economy and the stability in hotspots like Iran; and the Middle East with the seeming emergence of a new cold war between East and West.

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RESIDENTIAL LIFESTYLE PROPERTIES FOR SALE IN SOUTH AFRICA: The Properties For Sale in South Africa:

Click through to the below areas to view some fabulous opportunities on offer.

Gauteng: Click here Western Cape: Click here Boland & Overberg: Click here