The retail industry thrives on fresh stock as consumers seek out the latest innovations and fashions.
In England, many non-essential retail stores opened their doors to the public Monday (15th June 2020) and a fair few of them will be facing the challenges involved with mountains of unsold stock caused by the Covid-19 lockdown.
According to media reports, it’s potentially a big problem for them.
This got us thinking about how “fresh” the Estate Agents property stock for sale is compared with this time last year. Upon examining our data, it appears that they too have a surplus of old stock and no doubt a similar challenge of how to unload it.
June 20202 Property for Sale
First, we looked at all property which is listed as “For Sale” this month (June 2020). We then split this by property that came to the market in the last 3 months, 3-6 months and over 6 months ago.
Then we compared this with all property which is listed as “For Sale” in June 2019 and the results were surprising.
At a high level, the following chart displays the volume and percentage of property stock which is available in June 2020 compared with June 2019
The key take out from the above chart is if you want to buy a property today, only 26% of properties have come onto the market in the last 3 months. If you wanted to buy a property exactly a year ago, this figure was 55%.
For Estate Agents, older stock has been harder to sell. Most buyers will ask why it’s been on the market for so long, they will wonder what is wrong with it. Should they choose to make an offer it will often be well below the asking the price.
Furthermore, both of the largest property portals offer the option to filter by newly advertised properties, the largest timeframe being up to 30 days. Property portal subscribers will also receive daily email alert of all the newly added properties from their chosen areas.
The burning issue for Estate Agents therefore is – how do we sell old stock?
A Look at Price Bands
We then looked at the data split by the price bands we have used in all past client briefings:
The effect on a lack of fresh stock disproportionately affects the cheapest house prices. Fresh stock levels are also lowest in the cheapest house price bracket. With £0-£150k property, only 22% of stock is less than 3 months old compared with 53% in June 2019.
If we turn our attention to the highest priced properties (although they have been impacted the least) it is still the case that only 25% of £1m+ properties have come to market in the last 3 months compared with 48% a year ago.
So what does all of this mean?
Well our thinking was that to help pull the economy around, the upsurge in pent up demand we have seen must be matched by an equivalent level of quality saleable stock on the supply side. If this is not present – and the question of whether “aged” stock will be treated in the way it has been previously is still unanswered – then Agents, similar to retailers, will have to work that much harder to sell the stock that they have.