The modern real estate industry is a vastly different place to that of just a few years ago. Technology has given buyers and sellers unprecedented access to information, and real estate agents are often no longer the primary source of data relating to property investments and sales.
This increasing transparency into industry trends has raised questions over realtors’ roles in today’s market, and many sellers have debated whether an agent is really necessary at all. According to Schalk van der Merwe, franchisee at Rawson Properties Helderberg, the answer to that question remains a resounding “Yes”, but not necessarily for the same reasons as a decade ago.
“Our profession has changed,” says Van der Merwe. “It’s not just about connecting buyers and sellers and facilitating sales. The real value of a good, modern, real estate agent lies in their ability to interpret market information and apply – and communicate – those findings within a specific context.”
While home owners can access most municipal, provincial and national property sales statistics online, Van der Merwe explains that the reports on offer seldom account for situational influences and aberrations. This “partial picture”, he says, can be misleading without contextual interpretation.
“There is almost no information on the reasons behind record highs and record lows, or how those outliers impact the average sales prices and trends in an area,” he says. “Distressed sales, or sales in execution, also affect the numbers. It’s information like this that builds a complete picture of the market, and without it, consumers risk making assumptions that could negatively impact the future of their investments.”
Using his home territory of Somerset West as an example, Van der Merwe cites statistics claiming property growth of 27.4% from 2014 to 2016.
“That’s a very healthy number, and one that should instill a lot of confidence in sellers in the area,” he says, “but there’s no mention of whether the same figure holds true for full title, sectional title and vacant land. If you dig a little deeper, you’ll see full title properties haven’t performed as well as sectional title, and applying the same rules to both could lead to overvaluation of certain properties.”
The general acceptance of decontextualized statistics like the above can present even greater challenges to the market, says Van der Merwe.
“Sellers have seen the average time on market rising from 10 days in the third quarter of 2016 to 55 days in the second quarter of 2017 and are starting to panic about the future of their property investments,” he says. “That’s completely understandable, but also largely unnecessary.”
He explains that, when taken in context with market performance over the last few years, the seemingly large increase is merely an indication of the normalisation of a strong sellers’ market.
“It’s a natural part of the property cycle, and probably overdue in the Western Cape, which has seen property prices bolstered by the high demand created by semigration,” he says. “It’s definitely not just a reaction to our recent junk status. No market can sustain growth at the rate we’ve been seeing in Cape Town indefinitely – not when a similar increase in average income is not occurring.”
There are, of course, a few exceptions.
“There are still pockets of excellence where high growth is expected,” says Van der Merwe, “but again, the statistics don’t always make this clear or obvious.”
As a result, properties in the Western Cape are becoming more difficult to position accurately on the market, and the penalties for miscalculating are increasingly high.
“It’s more important than ever to take all available data into account – both current and historic – and then interpret it within your specific situation,” says Van der Merwe. “That takes a lot of knowledge and insight – something you can only get through years of on-the-ground experience. It’s much more than just numbers, and that’s where the true value of your realtor lies.”