Today, I bring to you something that our Estate Agency sales team brought to my attention last week. Estate Agents are selling properties without actually advertising them as being for sale! And they’re still achieving over the asking price for these properties, without advertising them!
Now this is partly because, as I have mentioned once or twice (and many more times) demand from buyers is still massive and a decent estate agent (they do exist!) knows their market, their buyers and their buying triggers.
Over the last 12 months, on average, Estate Agents have been selling properties at 2% over the asking price. On your average £400,000 property, this equates to £8,000 more than the asking price.
If we only look at properties priced at under £200,000, then over the last 12 months, on average, Estate Agents have been selling properties at 3.5% over the asking price. On a £200,000 property, this equates to £7,000 more than the asking price.
Now to look at some science behind the stats:
The way our Estate Agency team have done this is to look at properties that we know were going through the selling process in Q2 2022, compare this with Q2 2021, and then look at the difference.
Great Britain as a whole, we observed an increase in properties that are selling, but not advertised, at 2.4%. Now, this does not sound like a lot, but it is over 4,650 properties.
And this is just looking at one quarter. If we assume that level of non-activity over the course of a year, an additional 18,600 properties are now not being advertised, but are being sold.
When we look at this regionally, however, there are some strong disparities that are shown in the following table…
Across both Inner and Outer London, the percentage increase in non-advertised properties is high, equating to an additional 4,200 properties now not being advertised but are being sold over the course of a year.
Other places where this appears to be a more common practice are the West Midlands, the East Midlands and Yorkshire.
In the West Midlands alone, there is an additional 4,100 properties now not being advertised, but are being sold, over the course of a year. In the East Midlands, this figure is 3,000, and in Yorkshire, 2,650.
Whilst we do not want to get all mathematical on you, we’ve added a column for statistical significance. Where this indicates “Yes”, it means that we are more than 99% sure that the increase in non-advertised properties that are for sale, is a real significant difference and not just a random occurrence. After all, if this was a random occurrence, we would not be reporting it to you in the first place.
And in conclusion:
Whilst Estate Agents have a stock of people queueing up to buy properties, and they can sell these properties at a great price for the vendor, we expect this trend to continue.
If stock levels fall even further, and/or selling prices rise when compared to asking prices, then we might well experience higher volumes of non-advertised properties that are for sale.
In summary therefore, our view is that emergence of non-advertised properties is not a temporary phenomenon, moreover, it is one that is entirely dependent on future market dynamics.
The higher the underlying demand for property is, the less likely we are to see properties advertised for sale.
Finally – I hear you asking why I’ve written to you all blabbing on about Estate Agents…
Well, the point in this really was in relation to your own marketing of properties that go onto the market. If you only look out for properties that are going on to the market For Sale, then likelihood is that you are missing out on a load of property in your area that is going straight in at an SSTC Sold state. So always make sure you’re keeping up to date with your marketing and the who, what, why and when of what you’re spending your marketing budget on.