I had an interesting question the other day from a homeowner in Skerton who asked me the difference between asking prices and values and why it mattered. When it comes to selling property, there must be agreement between the purchaser (buyer) and seller (vendor) for a property sale to take place. The value a buyer applies to a property can massively differ from the value a seller or mortgage company places upon it. The seller, the buyer and the mortgage company must find an agreeable value to assign to a property so the sale can proceed.
In many of my articles about the Lancaster property market, I talk about values, i.e. what property in Lancaster actually sells for, but I haven’t spoken about asking prices for while. Now asking prices are important as they are one of the four key matters a potential buyer will judge your property on (the others being location, bedrooms and type). Price yourself too high and you will put off buyers. So let’s take a look at the Lancaster numbers.
Over the last 12 months asking prices (i.e. the price advertised in the paper and on Rightmove) in Lancaster have decreased by 14%, taking the average asking price in Lancaster to £181,000 (down from £211,000 twelve months ago).
Interestingly though, when we look at, say semi-detached property and flats, a slightly different picture appears. Twelve months ago, the average asking price for a semi-detached house in Lancaster was £167,800 and today its £163,200 (a drop of 3%); whilst over the same 12-month period, the average asking price of a flat was £114,100 a year ago, and today its £119,100 (a rise of 4%).
However, my research shows that the supply of property for sale in Lancaster is beginning to increase. In December 2015, there were 578 on the market in Lancaster today there are 619 properties on the market (up 7%). This will mean homeowners looking to sell will need to be conscious of how their property compares against others on the Lancaster property market. The Lancaster property market still has substantial momentum and sufficient demand remains to provoke more modest asking prices. This noteworthy increase in supply since Christmas is currently providing more choice for buyers.
Here is the second point to make. Asking prices are one thing, but what a property sells for (i.e. value) is a completely different matter. These are the average prices achieved (i.e. what they sold for or the average value) for property in Lancaster over the last 12 months…
You can quite clearly see, there is a difference between what people are asking for property and what it is selling for. You can also see in the apartment market, it is the more luxury apartments that are selling rather than the lower end market. Interesting stuff!
The underlying fundamentals of low interest mortgages and tight supply remain prevalent in the Lancaster property market however, the number one lesson has to be this … if you want to sell, be realistic with your pricing.