Contrary to many media reports, real estate is still in high demand. However, the number of inquiries and purchases has fallen sharply. The reason: financing rates are often far higher than rental prices, which is why many prospective buyers are turning back to the rental market. What does this mean for sellers?
At the moment, consumer uncertainty is also having a major impact on real estate. But this is not the only reason, as many asking prices are still far too expensive compared to the financing options available to prospective buyers. They are competing with rental offers. This reluctance to buy, due to high interest rates and inflation, is leading to significantly fewer inquiries. For sellers, this has an impact on the achievable price.
Expert assessment
Jens Tolckmitt, Managing Director of the Association of German Pfandbrief Banks (vdp), said at a presentation of the main price index for the first quarter of 2023 that there are comparatively few transactions at the moment. Sellers and interested parties are currently looking for a price equilibrium. In his view, this phenomenon will be with us for a few more quarters. Residential property prices over time According to analyses by vpd, residential property prices have fallen by 2.1% within a year - comparing the first quarter of 2022 and the first quarter of 2023. However, many experts believe that much more significant declines are to be expected for a market adjustment. Particularly in large cities, where inflation has been enormous in recent years, price adjustments of up to 40% are assumed in individual cases, depending on the location. This equates to the sharpest drop in prices since index records began and therefore presents sellers with challenges when determining prices.
If you are thinking of selling your property, it is essential to seek advice from a quality local estate agent. They will support you with the sale and, thanks to their many years of experience, will create a suitable pricing strategy to achieve a fair market price for your property. Despite falling prices, large profit-taking compared to the purchase price of the property is still realistic.
Better to sell now than wait for better times
Anyone who has to sell at the moment should do so. Because waiting is not a good option. After all, market experts expect prices to continue to fall in the coming months, as it is unlikely that the ECB will lower interest rates to a historic low of around one percent. As long as property seekers prefer to rent in uncertain times because purchase rates are too high, the price correction will only be complete when the gap between rental and purchase prices closes again.
Finding the right pricing strategy
The extremely dynamic situation on the real estate market therefore makes it difficult for sellers to assess the value of the property and the appropriate asking price. For owners, there are two dangers lurking here: 1. selling the property below its value and 2. being stuck with it because there is no interested party due to an offer price that is too high. It is therefore always advisable to consult an experienced professional estate agent. They will professionally determine a fair market price for the property, define the appropriate pricing strategy and take over the negotiations with the prospective buyer. Thanks to their experience and expertise, they can confidently justify the price to prospective buyers. Do you need support in assessing the price or selling your property?
Then contact us! We will be happy to advise you.
Note
For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are expressly included, insofar as this is necessary for the statement. necessary for the statement.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please have the facts of your specific individual case clarified by a lawyer and/or tax advisor. tax advisor.
