Avainsana: Kesklinn

The Korona crisis is increasingly affecting the housing market in Tallinn today. While radically cheaper homes are increasingly being seen in the market for profitable homes , it can also be said that they are most often concentrated in certain groups. These are today: the ground floor of the home, a wooden house and a large one bedroom apartment . Here you will find detailed information on how these very properties offer even better value to their buyer today.

The ground floors dominance

The entire housing market in the city center (ie Kesklinn) is directly affected by the following market image when looking at the ratio of ground floors, wooden houses and large one-bedroom apartments in terms of volume to each other.

The market share of the ground floors (ie <2nd floor in the house) of the total supply is up to 17%, which is almost 2x higher than for wooden houses (11%) and large one-bedroom apartments (12%,> 55 m2 in size).

The supply is therefore more congested than the ground floors, which means that they now have the most potential for the new owner & investor.

Exceeded sales times & same pattern repeats

When looking at how these sales times have been exceeded on average (i.e. days open in the market / DOM) beyond the ideal period, the following distributions are seen.

This also strengthens the picture of a market where the ground floors in particular are the most challenging homes for sale in the center of Tallinn today: almost half (46%) of the ground floor homes for sale in the city center have exceeded their normal ideal time in their listings today.

Ground floors harder than wooden houses & large two bedroom homes to sell

When each home is also associated with an observed ideal time in days by in which its marketing & sales usually close. These can be compared to the length of time it has been on the market. The result is delay of days for each segment.

This shows nicely how exactly the delay of the ground floors is about twice as long (ie -38 days) compared to the situations of wooden houses & large one-bedroom apartments: -17 days and -19 days , obviously. Generally, the average time to market in each group is longer than the ideal time when the ground layers are the slowest in the market.

This is how sellers react in a crisis situation

The way sellers – both private & brokers – do pricing is usually always the same: peer review locally for similar types of homes and set the price at a slightly higher level depending on the owner’s belief in its value. Now, as the epidemic strikes drastically, we can already see how the pattern changes week by week mostly in the groups discussed in this story.

The drops in the prices of already listed homes are a good indicator of how many sales have started to move towards the buyer. The proportions of these look like the following.

When the price adjustments for ground floors & wooden houses are quite close to each other (eq 38% & 41%), significantly fewer checks have been made for large one-bedroom apartments. Obviously, the owners of the first two feel much more of a challenge in closing sales compared to their original starting price in the market.

Buyer’s benefits in euros

Eventually, prices start to drop in certain sales situations to a level where they become profitable for the buyer in relation to their environment like the TOP-SALEs reports faithfully tell us weekly.

The number of these homes thus indicates how many homes offer themselves below the estimated market value around & the sellers have actually reacted strongly to the situation. The distribution of these looks as follows.

When just over a quarter of the sellers of both ground floors and wooden houses have switched to offering homes to the buyer, the same key figure on the side of large one-bedroom apartments is only 20%, ie every fifth home within the group.

If we look at how much on average prices have been lowered in euros to become favorable to the buyer during the entire marketing period, then we also see the following.

Again, it can be seen that the ground floors and wooden houses have decreased much stronger than the large two-bedroom apartments as their sales continue to be on market: around -6000 € / home on average.

Ground floors and wooden houses are most sensitive to checking their prices lower during the crisis of pandemic.

How much net benefits?

Finally, the buyer & investor are interested in how much value the sale offer includes – wiht price decreases / without them. This most important comparison tells you whether it is worth going into more detail and use your time with them.

This clearly shows how wooden houses are already priced best for the buyer today when these are followed by ground floors as well as large one-bedroom apartments. Thus, good offers can be found in all three groups, showing an average added value of around € 26,000 to € 32,500.

Wooden houses offer the most benefits to the buyer when the offer gets cheaper towards their closings.

The near future of the “Three Leaders”

The pandemic shock is thus hitting these sales groups most clearly and most. In the future, it is worthwhile – at least through the eyes of the investor – to follow exactly these from the market in the coming weeks & months.

• Wooden houses will continue to offer the cheapest option (now around € 130,000 and € 1,760 / m2) in terms of purchase due to the massive new housing in the city center and the higher appreciation of stone houses in general.
• The ground floors & large two-bedroom apartments are again the groups that will grow the most in volumes in the future as new production continues to create unsold homes for these. Of these, the ground floors provide the most added value at the next cheapest (on average € 141,000 and € 1,840 / m2 per home), price adjustments, and the most opportunities for the buyer & investor.

We estimate & expect that these three home properties will also be key drivers in price revisions in the coming weeks and months as the crisis continues, offering exactly the best opportunities for home buyers as well as investors to participate in the market.

Market information

TOP-ALE’s weekly reviews often give you a direct view of the best offers on the ground floors, wooden houses and large one-bedroom apartments.

Home browser also opens you direct current & updated access to list of sellers who offer these segments of homes (see pict below).