Future of the real estate market: these are the challenges for sellers

The real estate market continues to break records.

Thomas Osborne
Thomas Osborne
17 August 2022 Wednesday 00:46
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Future of the real estate market: these are the challenges for sellers

The real estate market continues to break records. According to the INE, home sales rose by 18.8% year-on-year in June, a figure not seen in this month since 2007, and a total of 58,010 sales were closed. Meanwhile, employment fell in July for the first time in 11 years and households continue to lose purchasing power - money is now worth 10.8% less than last year. And although the figures in the real estate sector continue to be encouraging, the first signs of a slowdown are beginning to be seen. The same report from the National Institute of Statistics, for example, details a monthly fall of 3.8% in the number of purchases.

The specialists of the real estate comparison HelpMyCash.com estimate that this slowdown trend will intensify in the coming months as a result of the rise in interest rates carried out in July by the European Central Bank. Although this measure aims to contain inflation, it also has a direct effect on the Euribor and, consequently, produces an increase in mortgage prices that would lead to a reduction in housing demand in the short term.

“It is logical to expect that the purchases will moderate if we take into account the increase in mortgage prices and the reduction in the saving capacity of families. But that does not mean that transactions will be completely paralyzed”, they explain from HelpMyCash. And they add that the challenge for owners who want to sell their flat in the coming months is to improve the sales strategy, be willing to negotiate the price and, above all, not lose prudence.

In a market where demand abounds compared to supply, as has happened up to now in Spain, every effort must be made to find a buyer. But the trend is beginning to change and, in a context of low demand, it is pertinent to optimize resources so that the property stands out from the rest. This is achieved by improving the sales strategy, that is, working on the appearance of the home, maximizing resources in real estate portals (virtual visits, plans, photographs, videos...) and, mainly, making an adequate appraisal before listing the property. for sale, among other things.

“The valuation of the house is the key to selling it quickly. A house that goes on sale at market price, as a general rule, takes less time to sell than another that is published at a high value”, the experts point out. That is why they advise having the support of a real estate agent who can make a professional valuation. “In a scenario where the possibilities of sale are reduced, the help of an expert can make a difference”, they add.

The trend indicates that this new real estate scenario will tend to correct the difference between the price of publications and the offers made by buyers. According to the Idealista real estate portal, this gap is around 20%. Faced with the rise in mortgage interest, buyers will have to reduce the money they spend on the purchase itself and, therefore, will be much less willing to pay premiums.

"Negotiating does not imply giving in to the buyer's demands, but it does imply being open to reaching an agreement that is convenient for both parties," says Paula Eseiza, a real estate specialist at the comparator. And she emphasizes that, many times, the owners assign to their homes an emotional value that for buyers does not exist. Therefore, it is advisable to do a professional appraisal of the home.

The threat of a recession can cause some uncertainty, but it is always better not to lose prudence. HelpMyCash specialists recall that, even in 2008, some 552,080 homes were sold in Spain, according to INE data. That is why they warn of the importance of not making hasty decisions regarding one of the most important operations in life, such as the sale of a home. In this sense, they highlight the importance of having the advice of a real estate agent, capable of advising, evaluating and negotiating objectively.