Indicators of an over excited market

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Robert

From: Robert Forward


Hi All.

Just starting up new topic of discussion for all to read and learn.

What do you see as LARGE indicators of an over excited market and why?

If you could sit back and recognise these indicators would you then invest in the area/city/region, if so why, if not why??

Cheers
Robert
 
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see_change

see_change

Reply: 1
From: See Change


For me, indicators that could be assessed could include

-Length of time from listing to sale

-Price below listing that sale occur at or percentage of sales occurring at listing prices

-percentage of sales going to auction

-auction clearance rates

-percentage of sales above or below average ( or recent median ) price. Would need to use a previous median but looking for shift in sentiment above.

these are a few ideas to start with

see change
 
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Reply: 1.1
From: H T


what about
- prices bringing more than even agents can estimate (true!!)
- despite being an expert with many historical sales for the area under your belt, your still WAY under the mark.
- prices seemingly going up weekly (ring a bell anyone, remember 88'ish and now!!

and...people in an absolute frenzy to buy anything..

HT
 
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K

karsal

Reply: 1.1.1
From: Sam Vannutini


Oooooooh! 88, what a year! My fingers are still smoking.
The hrd mentality is definitely present out there. I believe that in terms of the economic (or should that be Panic) cycle, Melbourne is at the "I'd better buy now at any price in case I miss out" stage.
As long as human behaviour remains constant, those who are prepared will make a fortune.
You have to wonder where people are getting their money from.
Two of my favourite indicators are:
Affordability. What the average mortgage repayment is compared to the average wage.
Vacancy rates. A tightening rental market often precedes an upturn and vice versa.
As for timing? Well, that depends on your philosophy. If you currently hold property, have it revalued as high as possible, then sit and wait. You'll be surprised at what a 1% rate rise can do to the market.

What did someone say about the experts exiting the market as the ameteurs got in?
Sam.
 
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Overexcited Market

Reply: 1.1.2
From: Matthew Campbell


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what about
- prices bringing more than even agents can estimate (true!!) - They =don't even want to put a price on things at the moment

- despite doing all the homework, your still WAY under the mark. - When =the price of the property just doesnt fit with your calculations

- prices seemingly going up weekly (ring a bell anyone, remember 88'ish =and now!! - I remember 88 , I was 12 years old :)



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what about- prices bringing more than even agents can estimate =(true!!)
- They don't even want to put a price on things at the moment
- despite doing all the homework, your still WAY under the =mark.
- When the price of the property just doesnt fit with your
calculations
- prices seemingly going up weekly (ring a bell anyone, =remember 88'ish
and now!! - I remember 88 , I was 12 years old =:)

------=_NextPart_000_00B8_01C12635.4C35C900--
 
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Reply: 1.1.1.1
From: The Wife


How about this as an indicator......I was going to bid over the phone, for a house in Brisbane, I liked the location and the size of the block, I also had heard some whispers about zoning in the area etc etc etc....so..i decided to have a go, I normally dont go anywhere near auctions.

So I have my guy in Brisbane attend the auction prepared to bid on my behalf, whilst on the phone to me,

I asked him to be my eyes, describe to me what is going on directly prior to the auction, how many people there, what they looked like, I also asked him to go chat with everyone, and to ask as many people as possible where they are from.

Ok, so two hours before auction starts he reports that there are apprx. 100 people mulling around the property, most he says, are from Sydney and Canberra, and a few from Melbourne, he tells me some have come really prepared with picnic baskets of food and drink.

I am getting the feeling that I am not going to get this property for the price I would like.

One hour before auction, and they have called in the police, it seems that the amount of people turning up, are spilling out onto the road, and it is becoming a traffic hazard, the auctioneer informs the waiting people that the auction must be delayed whilst the police erect barricades on the road and organise how they can close down one lane.

What a bonanza, I bet the auctioneer was beside himself with excitement, not to mention the owners of the property.

My guy tells me, that there is no way we are going to get this property at a resonable price, I agree, but ask him to stay, as I want to see the outcome, and you never know, we might just be surprised at what happens.

Auction starts, and the bids come in without asking, auctioneers gets angry at crowd because he cant hear what people are bidding, and he cant keep up, he asks twice for people to slow down.

I am on the phone listening, I am dumbfounded at the goings on, needless to say, I didnt make any offers, and the property went for a suburb record price.

What did I learn from this? That the market is over excited and I have a couple of houses a street away from this particular house, I am putting them to auction!

TW
~Life is a daring adventure, or nothing at all~
 
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Reply: 1.1.1.1.1
From: Colin Mills


Address would be most appreciated as would date of auction. I live in Brisbane.
 
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Reply: 1.1.1.1.2
From: Kevin Forster


What about 2 property shows a week on television mostly specialising in auctions showing happy vendors (most of the time) and happy sellers.

When the mainstream media is now getting in the property act after touting the benefits of shares and how much you could make from dot com companies and international shares then the market is definitely over excited.

Just waiting for a cabbie to tell me that property is where you make good money.

Kevin
 
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A

adaran01

Reply: 2
From: Adam Randall


Hello
Parents Bought a house in Frewville Adelaide 18 months ago for 230K (almost record price for the suburb back then), the house is huge with JAG kitchen and 2 big classy bathrooms, and sits on about 780sqms of land 5 mins drive to cbd.
The last 2 auctions I went to at frewville the houses went for 357K, 337K consecutively, the houses were pretty well done out (in my view no better than my parents house), on less land, smaller houses, same era (circa 1910-1920) although they were both on quieter streets, being that as it may over 100K difference in 18 months is pretty impressive.
Adam
 
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Reply: 1.1.1.1.2.1.1
From: Gee Cee Cee


What about you negotiate a good purchase for a block of land. Exchange contracts then even before settlement you have other developers offering $25k extra to buy it from you.

Gee Cee
 
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R

Robert

Reply: 1.1.1.1.2.1.1.1
From: Robert Forward


Bloody hell Gee Cee. You know how to pick up a deal down there in Wollongong don't you.

So is this going to throw your "built price" up by at least another $25k when it's completed?

Cheers
Robert
 
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Reply: 2.1
From: Donna Larcos


I bought a property off the plan on 23/7/01.
I went in four weeks later to pick my
colour scheme for the exchange and
found that they were now selling the
same units for $10,000 more. $1000
deposit, $10,000 return and I haven't even
exchanged the contracts!!
 
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Indicators (50% increase in less than 3 months)

Reply: 2.1.1
From: Andrew Scott


How about this one..

Address: 19/39 Murray St, Brunswick.

On 5th May, it passed in at $93,000 (the reserve was $100,000).

On 21st July, it passed in *again* at $147,000 (the reserve had moved to $159,000).

I don't know if the vendor took an offer, or has decided to wait another couple of months. :)

Andrew Scott
 
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