The Real Estate Market is Back to Normal
The Estonian real estate market is quiet and waiting, but not at a standstill. We are back to normal, which we haven't experienced for some time, comments ELUM Real Estate partner Kristi Djomin.
"The brief boom that lasted from the end of 2020 to mid-2022 made people rush into real estate, so they forgot about future loan obligations and bought new apartments 'off paper'. In the long run, however, such market conditions are never good, because they distract attention and also reduce the quality of what is being offered," said Djomin.
Now that the market has calmed down and loans have become more expensive, we are back to normal, where people are looking closely at the assets they are buying as well as their obligations, and sellers must again invest more effort to find buyers.
Unrealistic price expectations can backfire
According to Kristi Djomin, many sellers have not yet taken the current market reality into account in their price expectations and still want the prices from the "good times". "Such inflexibility can backfire badly, because in the end one might sell their property at a much lower price than the initial offer made by the interested buyer," she adds.
She gives an example where an apartment was being sold for 215,000 euros, to which a potential buyer quickly responded with an offer of 210,000 euros, but the seller refused. The market continued to calm down and the price had to be continuously lowered. In the end, the same apartment sold for 185,000 euros.
"Buyers are very aware of the current situation. Their purchase is considered for a long time, they visit multiple properties and the chosen property is visited several times before the deal is finalized," explains ELUM Real Estate partner. "Bank representatives also say that loans are not taken out lightly and people consider for a long time before making a decision."
According to Kristi Djomin, the broker's role is currently far more than just representing the seller. Similarly, buyers also need to be advised so they can better navigate the current market situation.
