The return of the bid

10.07.2020

This past six weeks has seen the (un)welcome return (depending on which side of the selling fence you reside) of our old friend the sealed bid.

As has been noted recently in these missives, the local market has been on fire since lockdown ended.

Bear with me whilst I list some year-on-year statistical increases for the past six weeks;

  • New buyer registrations – up 112%
  • Viewings – up 115%
  • New instructions – up 78%
  • Number of sealed bids – up 82%
  • Average percentage of asking price achieved – 100.27% (record, long term average 98.5%)

However…

Deals agreed – up 36%

And the figures behind these figures, are all stand-alone records for our 12 years of trading!

If you dig even further behind the figures behind the figures, you might ask yourself (well I did, but I’m comfortably OCD); ‘broadly speaking I’m seeing a 100% increase in stock levels, buyer levels, and activity, but why am I not seeing a commensurate increase in deals and fees?’ (and trust me as an owner of the business, I really, really wanted to know the answer to that one).

So, let’s drift sideways for a second from the grey science of statistics to the much more exciting, (could we say rather mauve?), science of behavioural economics (to my mind the only true branch of economics, I mean how can you monitor and explain matters economic if you don’t factor in the variables of human behaviour? Cue irate email from Deutsche Bank anorak, sorry, analyst…).

Let us confer with Kahneman, Gladwell, Thaler, Levine et al…as their mauve insights might explain things – because, whisper it quietly, (and trust me, I’m an estate agent) but estate agency can be a touch grey at times.

Now, we know that the market is excellent for the following reasons:

People move in and out of Wandsworth for familial reasons; marriage, birth, schooling, divorce, and from flats to houses, to a bigger house, or down to flats again, or back out to the country from whence they originally came. If you like, they make moves out of necessity.

When times are uncertain, they move less, they stay put, they make do and mend, they squish and squeeze. They certainly still move, but in fewer numbers.

A brief resume of events:

  • 2016-2020 – Four years of Brexit Bollocks = four years of uncertainty. Four years of making and mending. Four years of constrained market.
    (NB: In the background the fine denizens of WW are still, marrying, breeding, divorcing, and ageing).
  •  Dec 2019 – election win by Conservatives with good majority = we have direction for good or ill. We have Certainty. We’re leaving.
    (But, God knows, certainty must truly be the definition of a relative quality; we’re ending a 47 year relationship in six months’ time, and we’re still don’t have a deal…)
  • Ergo sum, Dec 2019 – Release of four years’ worth of newlyweds, children, divorcees and older people into the market.
  • Dec 2019 – Mar 2020 Market mayhem.
  • Mar 2020 Covid…

his past six weeks has seen the (un)welcome return (depending on which side of the selling fence you reside) of our old friend the sealed bid.

As has been noted recently in these missives, the local market has been on fire since lockdown ended.

Bear with me whilst I list some year-on-year statistical increases for the past six weeks;

  • New buyer registrations – up 112%
  • Viewings – up 115%
  • New instructions – up 78%
  • Number of sealed bids – up 82%
  • Average percentage of asking price achieved – 100.27% (record, long term average 98.5%)

However…

Deals agreed – up 36%

And the figures behind these figures, are all stand-alone records for our 12 years of trading!

If you dig even further behind the figures behind the figures, you might ask yourself (well I did, but I’m comfortably OCD); ‘broadly speaking I’m seeing a 100% increase in stock levels, buyer levels, and activity, but why am I not seeing a commensurate increase in deals and fees?’ (and trust me as an owner of the business, I really, really wanted to know the answer to that one).

So, let’s drift sideways for a second from the grey science of statistics to the much more exciting, (could we say rather mauve?), science of behavioural economics (to my mind the only true branch of economics, I mean how can you monitor and explain matters economic if you don’t factor in the variables of human behaviour? Cue irate email from Deutsche Bank anorak, sorry, analyst…).

Let us confer with Kahneman, Gladwell, Thaler, Levine et al…as their mauve insights might explain things – because, whisper it quietly, (and trust me, I’m an estate agent) but estate agency can be a touch grey at times.

Now, we know that the market is excellent for the following reasons:

People move in and out of Wandsworth for familial reasons; marriage, birth, schooling, divorce, and from flats to houses, to a bigger house, or down to flats again, or back out to the country from whence they originally came. If you like, they make moves out of necessity.

When times are uncertain, they move less, they stay put, they make do and mend, they squish and squeeze. They certainly still move, but in fewer numbers.

A brief resume of events:

  • 2016-2020 – Four years of Brexit Bollocks = four years of uncertainty. Four years of making and mending. Four years of constrained market.
    (NB: In the background the fine denizens of WW are still, marrying, breeding, divorcing, and ageing).
  • Dec 2019 – election win by Conservatives with good majority = we have direction for good or ill. We have Certainty. We’re leaving.
    (But, God knows, certainty must truly be the definition of a relative quality; we’re ending a 47 year relationship in six months’ time, and we’re still don’t have a deal…)
  • Ergo sum, Dec 2019 – Release of four years’ worth of newlyweds, children, divorcees and older people into the market.
  • Dec 2019 – Mar 2020 Market mayhem.
  • Mar 2020 Covid…
  • You thought that the Brexit market was bad…?
  • May 13th 2020 – End of lockdown for Estate Agents, they are released (from the asylum?) into society once more.
  • May-July 2020 Market mayhem as hordes of screaming lovers, toddlers, middle-aged tinderers and pensioners are re-released into the market.

(Hang on a minute, I thought that this was about sealed bids? Ed.)

Yup, hang on, almost there.

However, at this point I feel it important to turn our gaze from the frenetic, sunlit, bun-fight of the WW housing market, and cast it upon the horizon. For lo, the Storm Clouds do gather; second wave of Covid, wider economic woes, Brexit Proper…there may be trouble ahead.

Here come the bids…

Therefore, if I’m a motivated newlywed/divorcee/new parent/down-sizing Old, I’m going to make damn sure that I buy something that I know I will be able to sell, and sell well, should the economic crap hit the cooler; I’m going to buy the best in class.

Therefore, many people competing for the same property, therefore sealed bids, therefore record percentage of asking price achieved across the board, THEREFORE, despite 100% more buyers, doing 100% more viewings in a market with 78% more stock, only a 35% increase in revenue.

Because a very, very large proportion of them are all after the same thing, a sound property purchase.

Next week in this exciting series, Agency in the Time of Covid, we will be discussing Property Pricing.

  • You thought that the Brexit market was bad…?
  • May 13th 2020 – End of lockdown for Estate Agents, they are released (from the asylum?) into society once more.
  • May-July 2020 Market mayhem as hordes of screaming lovers, toddlers, middle-aged tinderers and pensioners are re-released into the market.
  • (Hang on a minute, I thought that this was about sealed bids? Ed.)

Yup, hang on, almost there.

However, at this point I feel it important to turn our gaze from the frenetic, sunlit, bun-fight of the WW housing market, and cast it upon the horizon. For lo, the Storm Clouds do gather; second wave of Covid, wider economic woes, Brexit Proper…there may be trouble ahead.

Here come the bids…

Therefore, if I’m a motivated newlywed/divorcee/new parent/down-sizing Old, I’m going to make damn sure that I buy something that I know I will be able to sell, and sell well, should the economic crap hit the cooler; I’m going to buy the best in class.

Therefore, many people competing for the same property, therefore sealed bids, therefore record percentage of asking price achieved across the board, THEREFORE, despite 100% more buyers, doing 100% more viewings in a market with 78% more stock, only a 35% increase in revenue.

Because a very, very large proportion of them are all after the same thing, a sound property purchase.

Next week in this exciting series, Agency in the Time of Covid, we will be discussing Property Pricing.