Because real estate sells less, a Lot real estate agent replies

How is the real estate market in July?

We are facing a complex situation. Buyers are finding it difficult to obtain bank loans and, more importantly, their investment skills have diminished as interest rates have risen. Opposite, the owners have not yet noticed that the market is declining. Wanting to sell your property at a price other than the market price is impossible. Until sellers adjust their prices, sales will remain tough. The average market overvaluation is 10%.

This also has the consequence of having a growing catalog of goods, due to lack of sales, and slightly less numerous buyers…

Since when has the real estate market experienced this turnaround?

In the first months of 2023 we worked well, because the compromises made at the end of 2022 materialized. We even exploded our commercial data. The two years after covid have been pretty stable; but there, with the evolution of bank rates, the situation has changed. The buyers are still there, but if they had to review their ability to adapt, they also noticed that market prices were going down. They are well informed. For example, I received four offers to buy this month that were rejected by sellers. No negotiation could be successful, it had never happened to me in my career. We are starting to see in France agencies closing down, agents going bankrupt.

What is the average budget for a buyer?

I just made a detailed table to my teams. If you take a couple, the new buyers, who could negotiate a €920 monthly payment by borrowing over 20 years at a rate of 0.94, had a budget of €201,000 at the start of 2022. Today, with a rate of 3.85, with the same monthly payment, he has a budget of 153,000 euros. Worse still, if the evolution of credits continues, we could reach 5% by the end of 2023, or a customer budget of around 134,903 euros.

The property tax in the Cadurci area scares buyers

Who are your customers? What are their profiles?

They are mostly Lotois, a local clientele. We have seniors selling to be closer to town, estates, couple separations, first time buyers, etc. In short, the daily life of society. From the foreign customer’s side, it’s not very important. They are mostly Belgians.

What types of properties are sought after?

Clearly small pavilions ready to be inhabited, with a simple garden. Above all, they insist, they no longer want a house with work, on the one hand because they can no longer find a craftsman and on the other because of the soaring prices of materials. Even in Cahors people are demanding at the same level… And then when the properties for sale have an energy diagnosis in F or G, it doesn’t help.

The other decisive point for the choice is the property tax. When on a residence in the center you pay 1800€ of property tax per year for a T3; and that for a 90 m² cottage in Flaujac-Poujols you pay three times less. The calculation over 20 years is quick: €1,200 difference over 20 years, this corresponds to €24,000 in taxes to add to your real estate investment…