2010 - "A Year of Bargains"

"Seeing the opportunity in every challenging situation...."

There is no doubt that 2010 will be exceptional in its challenging economic outlook. At 4ever Spain we can nevertheless see some signs that encourage us to be positive and think laterally about the market:
 

2010 Selling prices do not yet reflect market prices.

Although in recent years, they reflected closely with each other, currently market prices – that is those prices, which really close a deal - are around 25%-30% below the prices that buyers are asking.

2010 will be a year for making deals.

There will be a greater supply and buyers will be able to pick up even more bargains. Sellers will gradually realise that changes in the market require even sharper price declines, below levels they could ever have thought possible. In addition, property owners with economic worries will be left with no choice but to supply the most attractive properties at viable prices.

2010 will be the year with the highest number of properties for sale in Spain's history.

There are estimated to be between 1 to 1.4 million homes still unsold, and this stock will set the benchmark for the development of the market in terms of both sales and rental. Prices in both markets will continue fall.

2010 There is very strong demand. 

Buyers are starting to respond to the significant drop in prices. Thousands of people are looking for a home, be it to buy or rent. Record numbers of unique visitors are registering on the 4everspain.com website.

Sellers Need To Reduce Their Prices

If you're not willing to cut your price dramatically, you'd better be able to rent out your property or sit out the fall in the market.

It’s a buyer’s market, yet they’re not buying much. Here are some key points for sellers:

Buyers are certain prices will fall a lot further. They’re not willing, therefore, to buy at what appears to be today’s prices - which means it’s over-priced.

If properties are priced correctly, they will sell. Therefore they are not priced correctly.

Sellers need to realise that if they don’t start thinking about tomorrow’s price as today’s price, they’re going to struggle to sell. Barring unusual local reasons, most sellers should make big cuts to their asking price now.

Sellers should not price high and invite lower offers. Clearly most buyers are just waiting on the estate agents’ books for the prices to fall further. The best selling strategy is to knock off a big chunk from the offer price to what you really think it’ll sell for and accept no offers. This will greatly increase the interest in your property, and the serious buyers will accept a fair deal.

Prospective buyers will have a greater chance of getting a mortgage if you’ve taken into account the fact that tomorrow’s price is actually today’s.

How much should you knock off?

How much you reduce your price by depends, to an extent, on regional factors. The few properties that sellers have sold in recent months have done so at a price around 15%-18% lower than at the peak in 2007, on average. Most buyers will be thinking of another year of falls. Therefore pricing your property at around 30% below the peak will work for most sellers.