When you decide to buy or sell a home, there are several things to consider. One factor that will affect your experience is whether it is a buyer’s market vs. a seller’s market. Whatever side you’re on, you’ll want the odds to be in your favor so that you can have the best possible outcome if that’s to sell fast or to buy from a large selection without bidding wars. The market will determine how the process will work for you.
What is a Buyer’s Market?
A buyers market in real estate is when there are more homes for sale than buyers looking for homes. This means there is a lot of inventory for buyers to pick from, and they’re more likely to find what they want. Also, there is more room to negotiate prices on homes, especially homes that are being sold by eager sellers. In a buyers market, sellers have their work cut out for them.
Sellers have to get creative about attracting buyers since they have so many options. This can be frustrating for them. If the seller has a significant payoff amount and hopes to make a profit, they may opt to hold off until the market changes in their favor.
What is a Seller’s Market?
A seller’s market means that more buyers are looking for properties than there are available homes. This leads to bidding wars and can end with the seller making a hefty profit. Since properties sell fast, the buyers are competing and will often offer more than the asking price.
Due to the increased demand, sellers can price the house where they want and don’t necessarily have to do as much work. Mostly because the buyer’s in the seller’s market is more willing to compromise on their must-haves. Not that you shouldn’t make your home presentable, you’ll still be competing with other sellers.
What factors determine the market?
Figuring out if who’s market it is can help you decide if it’s a good time to buy or sell. There are several ways to know this. One key factor in determining the market is by checking the inventory. If you notice there are a lot of properties listed or if there are homes that have been on the market for a while, that usually indicates that it is a buyer’s market. Fewer homes available generally means it is a seller’s market.
Other indicators include reviewing recent local sales. If all the deals in your area are selling for the asking price, it is a seller’s market. In contrast, price cuts reveal a buyer’s market. Watching trends over time will help to pinpoint market health. Seasons are also a factor in determining a seller’s market vs. buyer’s market. In general, more people are looking for properties in the summer months, making it a buyer’s market. Likewise, there are typically fewer listings in colder months, making winter a seller’s market.
How does this affect me?
Anyone can buy or sell a home at anytime but there will just be different strategies you’d need to use in different climates. Buyers in a seller’s market should act fast on places that interest them because of how quickly transactions are happening. Buyer’s should also be prepared to pay what is being asked and not try to underbid. Seller’s in a buyers market need to be wise with pricing and presentation. Also they should consider some incentives such as leaving behind appliances etc.
When you have the insight you can make the market work for you no matter if you’re buying or selling. Research and planning can take you a long way toward your goals and help you come out on top.