I had an interesting question the other day from a homeowner in the Skirbeck Quarter 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 Boston property market, I talk about values, i.e. what property in Boston 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 Boston numbers.
Over the last 12 months asking prices (i.e. the price advertised in the paper and on Rightmove) in Boston have increased by 5%, taking the average asking price in Boston to £176,100 (up from £167,900 twelve months ago).
Interestingly though, when we look at, say detached and terraced property, a slightly different picture appears. Twelve months ago, the average asking price for a detached house in Boston was £220,200 and today its £241,500 (a rise of 10%); whilst over the same 12-month period, the average asking price of a terraced property was £134,000 a year ago, and today its £147,000 (a rise of 10%).
However, my research shows that the supply of property for sale in Boston is beginning to increase. In December 2015, there were 320 on the market in Boston today there are 355 properties on the market (up 11%). This will mean homeowners looking to sell will need to be conscious of how their property compares against others on the Boston property market. The Boston property market still has substantial momentum and sufficient demand remains to provoke more modest asking price rises. This noteworthy increase in supply since Christmas is currently providing more choice for buyers and tempering asking prices.
… And 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 Boston over the last 12 months…
- Overall Average £157,500
- Detached £193,600
- Terraced £107,200
You can quite clearly see, there is a difference between what people are asking for property and what it is selling for. The underlying fundamentals of low interest mortgages and tight supply remain prevalent in the Boston property market however, the number one lesson has to be this … if you want to sell, be realistic with your pricing.