Soft House Prices or Unrealistic Vendors?
There’s been a bit of discussion in recent months about a softening housing market around Australia but I wonder how much of it is more indicative of unrealistic expectations on behalf of sellers? In futures work we think in terms of Assumptions and Expectations and aim to test our understanding and so I offer this isolated example of the housing market in action for you to think about whether ‘softening’ prices are a reality. Around three years ago a two bedroom brick veneer house in Cummins Rd, East Brighton sold for approximately $440,000, which was pretty much market value at the time. The new owners subdivided the land and about a year ago built a three bedroom townhouse of a pretty high standard on the rear of the property. The style of house is likely to be attractive to a more limited market and there’s no outside space to speak of. So what would you say would be a fair price to expect at auction?
Potential bidders were pretty clear. The Real Estate Agent (Buxtons) did a great job at talking the property up and highlighted everything that was good about the property. But I wondered if the agent knew he was flogging a dead horse so to speak because he asked for an opening bid of $800,000 and eventually kicked the auction off with a vendor’s bid of $700,000. When no further bidding emerged he placed another vendor’s bid at $750,000 and the property was passed in.
Now I’m not too sure what pricing strategy the vendor had. I know that the vendor has also done a fair bit of work in the front property in which they live and I wondered if their price was based on not only what they paid for the original property, and what they spent building the subdivision, but also was an attempt to recoup money spent on their own home? But for me, having paid $440,000 three years ago and having spent perhaps another $200,000 or so adding a sub-division property out the back, expecting what is believed to have been a sale price of well over $800,000 seems an example of unrealistic expectations.
Right now entire single block double story dwellings a few years old are selling in the area for about $850,000. Some would say that even in a warm housing market, a realistic and fair price for the new Cummins Rd dwelling out the back is closer to the $600,000 mark. I’m sure you know of similar examples around Australia and beyond. When we consider real estate as an indicator of social and economic health, we need to be careful about placing too much emphasis on auction outcomes, unless we also consider how realistic the expectations for sale prices also are. And that perhaps something for lenders to also consider
In around a week’s time there’ll be a version 2 of a Trump Presidency in the United States. One thing I’d expect to see is a much less bridled Trump presidency. The first time around a number of long standing and experienced people were around to temper and guide some of the thinking. This time…
Read More >Looking Up Feeling Good are delighted with our involvement with Steel Chicks and this session with Dr Kim Hazendonk was another great example of bringing immediately useful insights to the attendees. Dr Hazendonk spoke about ways to use your brain more effectively, how to overcome the distractions both in the workplace and beyond – brilliant…
Read More >Or so it may seem. This quarter has seen me interstate facilitating some strategic planning workshops; overseas working with an established Government client, working with CGD, SELLEN, and Hilton Manufacturing among others here in Oz, a couple of weeks holiday down in Tasmania, and also the occasional radio interview looking at the ‘Future of…’. And…
Read More >Some thoughts flowing from my session discussing challenges in Futures Consulting posted by James Balzer: I’d explained to the group that what I do is engage employees in thinking about their own and their organisation’s future potential. My strong view over twenty years of work in this space is that employee engagement is DIRECTLY driven…
Read More >Tomorrow morning (Friday the 12th) I’ll be joining Elizabeth Kulas on Disrupt Radio discussing the Future Of Workplaces. There’ll be a particular focus on why most organisations choose to struggle because they rely on outdated models of employee management. A 7.15am kick-off where, in about 7 minutes or so, I’ll try to distill 20 years…
Read More >It’s extremely rare that I post to a specific article and say ‘go read this’, which is what I’m doing today. This article on goal directed intelligence at a micro level is a challenge to read. And I do recommend you read it because it pushes forward our understanding of how our biology and arguably…
Read More >If you followed my numerous posts over the years you know I like jumping in early on new products or services – not all have been successful, especially on Kickstarter and Indiegogo, but you roll the dice sometimes and see what happens. Over the years Looking Up Feeling Good was an early community investor in…
Read More >In the 1760s Josiah Wedgwood changed forever the nature of workplaces. He expanded his pottery business and constructed a new large scale factory that required two critical elements: a) Systemisation of processes to ensure consistent high-quality outcomes b) Skilled workers on site The systemisation required experimentation, observation, trials, failures and recording of data – what…
Read More >We’re delighted to announce that Neuro-Psychologist Dr. Kim Hazendonk of Positive Brain has accepted our offer to join our elite speaker’s group. We’re looking forward to bringing her to more groups across Australasia as she discusses effective workplaces, positive mind management, and managing busy lives. If you have a need for an engaging and passionate…
Read More >I flag my bias towards the need for a vastly improved approach to managing staff in the work environments. V A S T L Y improved. I’m still surprised at how clunky, disorganised or naive some senior managers are when it comes to that part of the business that considers ‘people’. And rather than cover…
Read More >