Irritants

A couple of things I need to get off my chest this afternoon:

Firstly, I simply can't get over the number of properties in our area that have been on the market for 3 months or more -- in fact several have been on the market for well in excess of 6 months. Has it not occured to the vendors that maybe, just maybe, their properties are well over-valued? In my view buyers are happy to engage sellers if they think a property is around, say, 10% over-valued but much more than that and buyers are dissuaded because they'd rather avoid dealing with anyone they deem to have their head in the clouds. How successful is an offer of, say, 20-25% below the asking price likely to be? The answer to most rational people is: "not very", and so they prefer not to waste their time and look to other opportunities.

It's true that some vendors, not so long ago, were able to adopt a strategy of: If I wait long enough, some idiot will eventually turn up and pay the price, but this is far less likely to work in the current environment where the market has turned sour and the newsflow has turned negative. With the "Buy property, get rich quick" trade finally burning out, even the property market cheerleaders out there will have to acknowledge reality at some point.

But my message is this: If your property isn't selling, it's probably because it's grossly over-priced and nothing more. Get your head out of the clouds and adjust your expectations otherwise the financial pain down the line may be greater than you can feasibly handle.

My second gripe centres on the information peddled by metropolitan Brisbane's Saturday morning must-read, the Courier Mail's Property section. (And before anyone mentions it, I accept that the "must-read" status may recently have been downgraded as Brissy's denizens choose not to find out how much their property may have depreciated in the past week).

But I digress. The issue I have is with the data in the Recent Sales section, specifically that which relates to Auction results. When a property fails to sell it is Passed In, often with the highest Bid posted in the Price column. Ordinarily this information would be very useful to the market i.e. if it were the highest real bid from a registered bidder on the day, but most often, this is the vendor's bid, which I would argue is useless information for the market and, in fact, highly misleading (and deliberate, at that). I can't believe this practice hasn't been outlawed at either Federal or State level. At the very least it should be flagged whose Bid this was. In any event, the last real bid is the information that buyers really care about. The vendor bid is as useful as a chocolate tea-pot because, at best, it may serve to inform the public around what level the vendor wishes to sell their property and all we buyers want to know is where the market is valuing it.

Sorry, did I say "a couple" of things? I meant three. Median house prices -- what a pile of good-for-nothing $%&*@£! I mean, has the penny not dropped yet, that this is largely, in the case of housing, a completely useless and meaningless measure? Especially as you start to look at local stats where granularity deteriorates markedly. A local agent sent around a booklet, complied by herself, that contained some stats that "buyers might find useful", one of which was a list of Median house sale prices for each month of 2010 in the local area. The lowest price was in the low $400k's, most in the $500k's and the highest was around $1.5m (in a month when there was essentially only that one sale!). Gee, thanks for all your help. How, on God's green earth, could that information ever be useful? All it does is highlight just how useless it is. But it's not the agent I'm irritated by -- she's simply one of many sheep drawn to Brisbane's housing market beacon. Yup, I'm talking about the Courier Mail's Property paper!