Thinking that, during the beginning of the pandemic and quarantine, there were owners who had to close their businesses, clinics or SMEs and “needed” to sell some property, until a minimum of 7 deeds in April of last year.
Although those owners “needed” to sell, I rule out that they did the impossible not to part with that good at low values, or “what they were offering.” To have that property, those owners surely suffered a mortgage loan or pawned their last savings. Or maybe it was a family property for many years. In conclusion, They had a hard time owning and maintaining that property.
Since the beginning of 2019, in the real estate market we have seen a significant slowdown in the number of sales operations, further enhanced during 2020 and 2021.
As we mentioned at the beginning, the offer began to widely exceed the demand and therefore we began to experience a drop in sales prices.
But today’s homeowners no longer “need” to sell: they have just decided to sell and do something else with their money.
The lack of sale has put all real estate colleagues on alert and anxiety, because it is their main source of income. That has marked a revaluation work of the properties that were on offer to the drop, and the appraisal of the current properties that enter the market for sale was also down.
Today the apartments that are offered for sale have tripled and perhaps we can award it, among others, to the following reasons:
- Election year, dollar goes up, so I want dollars; I sell.
- Rent law, my tenant left and that business is no longer working for me; I sell.
- We are going to live in a house on the outskirts of the City (for example, Zona Norte); I sell my apartment in Capital.
- We are leaving the country; I sell.
All this imbalance between supply and demand has caused a drop in prices, and this drop has been persistently encouraged by real estate owners who need to sell and invoice.
The owners have been lowering prices, giving in to their claims and expectations, and we see that they have reached a minimum limit that, we understand, they are no longer willing to cross. In spite of that, all the guns are aimed only at those owners with the intention that they continue to lower and lower prices even more “because the buyers do not arrive …”
The questions we ask ourselves then are: How much will prices go down? 1000 usd / m2? 500 usd / m2? Why would Buenos Aires have those values when Santiago de Chile, San Pablo, or Montevideo, among other capitals in the region, remain at 2,500 usd / m2?
A situation has come where the owners no longer go down, they decide to close their apartments (they don’t rent them either) and wait until the political, social and economic storm passes. I see that real estate companies no longer have, therefore, a “target” (the owners) where to keep aiming, to continue persistently with the price drop.
Real estate colleagues, I have good news for you, a new stage of the real estate market is coming: we have to work with buyers now.
Along these lines, there is a large segment of potential buyers, who have kept the money and who have “postponed” their purchase decision. The question is: Postponed until when? The answer is: postponed until the values reach their minimum and there they will go out to buy.
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We see that since August prices have not dropped any more and they have found their floor, and those buyers are still waiting for the news to begin their search and go out to buy. How do they receive this news? Who tells them? How do they find out? Real estate agents have to communicate this news, hand in hand with journalists who publish articles in the media.
However, they are not reporting it yet because realtors are still nagging sellers, and they have already sold out instead of turning around and advising buyers: “The prices have already reached the minimum, they do not go down any more and now the one who has not yet bought, is kidding.” Those are the headlines that a couple of months ago we needed in the newspapers and news portals.
On the whole, I think that until now we have had little creativity and we have insisted on “working” the sale only with the salespeople. It is time to know how to advise the buyer segment (which there is) and continue to speculate.
Prices hit the floor, and I’m still not sure they will start to rise. What we are sure of is that they will not continue to decline.
Master in Business Administration, Real Estate Broker and CEO of Giavedoni Properties.
Source From: Ambito
