As we come closer to the end of the current pandemic, we are in a unique position to observe the edge of a transition. Indeed, it is very likely that in the coming months, as vaccinations become more widespread, cases go down, and quarantine measures are reduced that we will see a huge boost in economic activity across many consumer-related industries.
Indeed, we are already seeing some of the precursor effects of this coming reversal. Things like air travel, luxury spending and pent-up demand industries are all seeing a growing surge in business that will soon match the level of commerce we saw at the beginning of 2020. Perhaps one of the most interesting cases for this upcoming boom is the real estate market.
Of course, real estate and the real estate agents who are the professionals in that industry are always subject to global and federal changes. There is no inexpensive property, and anyone looking to deal in it will have to have a fair amount of capital to begin. But how did the pandemic affect the housing market?
How the Pandemic Affects the Housing Market
The housing market relies on having both buyers and sellers. In periods of low economic activity, such as those caused by restrictions on travel and business operations by local, provincial and federal governments, it is common to see fewer buyers and sellers. Although the reasons that both drop off are not the same.
For sellers, an economy in trouble does not bode well for their homes. If they bought when the price of their house was higher than it is currently, most are likely to wait until the conditions are more favourable. That is to say that sellers prefer to sell in good market conditions because they can raise their list price and drive a better bargain for themselves.
While it might seem like buyers would relish a cheaper housing market, we often find the reality does not match. Many real estate agents will tell you that this is driven by the fear that prices will not recover. Even when faced with a once-in-a-lifetime deal, many are more skeptical of what they don’t know than what they do.
Basically, sellers will hold for better conditions to recoup their perceived cost (sunken cost fallacy), whereas buyers will hold until they are sure that they can turn a profit or at least not lose large sums of money (risk aversion). Here it is important to note that every individual will develop their own tolerance for risk, so even in extreme circumstances, you will still find bold buyers and savvy sellers.
How This Knowledge Adds Value to Your Property
Understanding the psychological underpinnings of the housing market accomplishes several goals, which is why it is such a powerful tool for real estate agents like those found at jdrealestatecalgary.ca. If we acknowledge that people are likely to hold fast to what they know rather than introducing change and uncertainty, we can begin to predict the future. To a limited extent anyway.
What does this look like in action? If you are planning to sell your home in the next couple of months, you may want to raise your asking price as those who have been waiting for the right conditions get ready to spend their hard-earned savings. It also means that you will have to find a qualified professional to assist you in the property selling process.
How Real Estate Agents Help
While understanding the psychological factors that influence people’s buying decisions is relevant for personal and professional knowledge, it can only take us so far. Much like how you visit your mechanic to receive proper maintenance, fluid checkups and other related activities, visiting and working with a real estate agent gives you access to their unique skill set.
This skill set includes several relevant skills that can aid in your property sales, such as experience with the market, experience with other clients and much more. Let’s take a look at how each of these skills can provide you with a better outcome than the alternative.
Experience with the Market
When real estate agents or Realtors have experience with their target market, they can help you ensure that your deal is favourable. Being able to discuss the virtues and unique traits of your property is a part of this experience and neatly ties into your chosen professional’s ability to showcase what makes your property’s market so valuable.
But the benefit of a real estate professional knowing their market is about more than just making a more compelling sale. It is also relevant as it informs them about what other properties in your area are selling for, what people are wary of in them, and what possible activities you can do to make your property more appealing or attractive to potential buyers.
Experience with Other Clients
The experience of real estate agents as it concerns their previous clients is essential for a successful purchase or sale. Not only will they be capable of seeing when to push or drawback during negotiations, but they will also bring relevant historical examples of how they solved certain problems and other concerns during the course of their representation.
Additionally, experience with other clients often leads to a better experience overall. As Realtors grow within their market, take on challenging projects and go through the process of negotiations, they learn the “beats” of the process, if you will. Understanding how property sales typically work, like when to make a move, is an invaluable skill.
As anyone who has gone through the process of a private sale will tell you, it requires a fair amount of reliability and dependability. You have to organize open houses, negotiate with potential buyers, put your house on listing websites and all of this is merely the tip of an iceberg. With the assistance of a passionate and timely real estate agent, realtor or other real estate professional, many of these worries are off-loaded to someone else.
While our first instinct is a sigh of relief, the problems may not disappear if you chose the wrong person. Therefore, having the right professional on your team means having a reliable person who you can trust to put your property in the best light, advocate for the best possible option and generally make sure you are satisfied completely with your experience.
Adding Value to Your Property Sale
You first learned to add value to your property sale by using our psychological triggers to determine the best time to enter the market. Hint: it’s in the next 3-6 months or so. Next, you learned how real estate agents could improve the process through their knowledge and experience.
These are both fantastic ways to add value to your property. While they are not the typical advice of beautifying your kitchen, redoing your backyard or finishing your basement development, they will certainly provide ample value to you during your next property sale. Interested in learning more about your real estate market, real estate agents or anything else to do with buying and selling property? Make sure you check out jdrealestatecalgary.ca for all the details you need to know.