We’ve written several posts around how Coronavirus has affected the property market and our opinion on what may happen in the future. Now it’s starting to re-open, with a few estate agents opening their doors and starting socially distanced viewings the effects of the lockdown and halt to the property market are starting to become clearer.
RICs have reported that around 80% of those who contribute to the survey saw sellers & buyers pull out of transactions, an incredible figure.
Prior to the outbreak the market was looking good, before this happened there where three successive monthly increases in terms of new buyer demand. The outbreak started to escalate in March and lockdown was announced on the 23rd – cue a -74% drop in enquiries.
It didn’t get much better as time went on either, newly agreed sale balance for April fell to -92%. There was also a highly reported decline in new buyer enquiries on a whole at -93%.
What does all this mean?
The above can be quite Jargon heavy, but if you read between the lines, as you would expect it means that the property market, new buyers, sales and viewings have all dropped off significantly as the lockdown has gone on.
RICs are a reliable indicator on house marketing trends. They are the body who survey properties for those looking to buy, so when their surveys are significantly down that reflects the market itself. A lot of experts think that the market will be significantly damaged for the coming year, and at this early stage there is no real way of telling.
What we can do however is take a look at the current buyer and seller trends. A great indicator is a tool called Google Trends; it shows you the interest over time of specified searches in Google. Using this and a few popular search terms you can see the trend of the market follows what RICs have mentioned in their report.
Analysing The Demand (Buyers)
People who are looking to purchase a house might search something like “houses for sale” which has 450,000 searches a month on average. You can see in the below graph that the trend is similar with increases from the end of December right up until the week of March 15th - 21st.
As you can also see by the graph, the signs of a recovery are pretty positive. It doesn’t necessarily mean people are in a position to buy, but it means that people are starting to do their research again, which is a great sign.
There’s likely to be a period where people are hesitant to purchase with the uncertainty around jobs and returning to work but initial signs are promising. Another thing to consider if you are looking to buying is there is going to be a significant backlog when it comes to every step of the process, estate agents, property portals, photographers, surveyors & conveyancers.
Analysing The Demand (Sellers)
Finding the term for selling a house is a little trickier as there are lots of different methods to sell your home such as auctions, estate agents, online estate agents and of course quick sale companies like ourselves, meaning the number of searches is quite diluted. The biggest term is probably “estate agents near me” with around 27,100 searches a month.
You can see a similar trend for sellers, but it perhaps hasn’t yet recovered to the level of the buyers’ market:
It’s hard to compare the terms as they are both relative, however it should give you a positive indication that the market is returning in a quite healthy way.
What The Future Might Look Like
It’s our opinion that for a good few month the market is going to be slower, as everyone works to catch up on the backlog. People are also initially going to be cautious in re-entering the market, lenders might also hold off for a while on granting mortgages, so there could be an initial spike in research and property viewings but not as many tabled or accepted bids.
Sellers are likely eager to get a quick sale, after spending such a long period in lockdown. Typically, if this is the case you might see sellers drop their asking price to move in line with buyer’s demand, at least for a period of time that everything returns to normality and mortgage lenders are willing to offer more mortgages.