Regarding this, we receive many inquiries from sellers, buyers and even colleagues from our sector.
I´m sorry to communicate that no one can say … yet. Why not? Because we all depend on observing the prices of properties that have been sold during and after the Corona crisis.
In order to a better understanding, it is important to know how a real estate professional / appraiser values a property.
You have to work with ”contemporary witnesses”. These witnesses are houses that have been sold in the last few weeks / months in the same environment; in addition, with a typology, size and characteristics very similar to the property we want to estimate. The more reliable the witnesses, the more accurate the valuation will be.
But we are also looking for witnesses that are still for sale; that means those that already compete on the market but are not yet sold. Here, before taking a property as a witness, it is very important to investigate how long the real estate has been on the market. The longer the property is unsold on the market, the less it serves us as a witness. Because that could be an indication that the property is most likely overvalued.
Furthermore, these witnesses are also very important because they tell us how the supply market is behaving: Have we noticed price adjustments on the portals since the beginning of COVID-19 crisis? The answer is a vague YES. But can we generalize that? Let´s put it this way: all those sellers who have a greater urgency in selling, have been more susceptible to making adjustments. What percentage are we talking about?
Well, we would say it is approx. 5% in our area; in a few cases higher. These data are according to the current status on real estate portals in the Costa Maspalomas area, although there will be many changes from new week. Namely, when real estate companies will open their business doors again. We believe that the percentage will then reach around 10%.
And will that be enough? We´ll see it as the weeks go by. Most likely NOT. But as you can see, it is very easy to sell, even if the price of a property has risen a lot, when there is a great demand; and the easier it is to sell at bargain prices during very complicated moments. But it is only fair and equitable to determine the correct value, so that neither the seller nor the purchaser lose more than is absolutely necessary.
That is why the pricing system will not be recomposed until two or three months have been passed.
But not only in times like now we see many overvalued properties on the real estate platforms. And we´re sorry to say, most of these ads come from private individuals. Although a few agencies won´t escape, precisely because they ”put their fingers in the air to find out where the wind is blowing from”. Certain is, that they lack witnesses that have been sold (we all know the neighbour, who CLAIMS, to have sold for 20.000€ more).
CANARINVEST PROPERTIES works with various tools to obtain accurate figures:
- We are directly connected to the Registrar valuation system throughout Spain.
- We have agreements with 2 of the most important appraisal companies in the country that also provide us with data of great interest.
- We dispose of a technological application that provides us with an analysis of all properties for sale in the most important portals.
- CANARINVEST PROPERTIES is a member of 2 real estate exchanges that are shared among Real Estate Companies (MLS = Multiple Listing Service), namely BOICAN (for all the Canary Islands with 110 associated agencies) and AGORA MLS (at country level with more than 450 associated agencies). These 2 MLS provide us with a lot of information on how the market is behaving.
It is important that you consider these details when looking for a real estate agency. Keep these details in mind. Accordingly, you can ask how and with which tools the agency works.
Hopefully this article was helpful to you. If you have any further questions, don´t hesitate to write to us.
Article written by Renate Arnsteiner on 01/05//2020