Know Your Markets

You’ve heard the terms thrown around- “it’s a buyer’s market”; “it’s a seller’s market” or maybe more confusing, “it’s a bit of both”. So what exactly does all that jargon mean and how does it affect your life right now? There are three real estate market types, summarized below.

Seller’s Market

A Seller’s Market is characterized by a shortage of homes for sale. This creates demand from buyers and puts sellers in the driver’s seat for negotiations. Simply put, there is less than 6 months of home supply available.

When a home goes for sale in this market there will typically be multiple offers. This gives sellers a selection of options to receive full payment for their property. In this situation, there are more people looking to buy than there are homes to buy, and bidding wars ensue. The sellers can decide to take cash offers over offers with contingencies.

In this market, it is more important than ever for buyers to get pre-approved before beginning their home search. Doing so gives better leverage to buyers, as they will have better chances of getting the home they want, when they want it .

 

More Demand than Supply

Buyer’s Market

A Buyer’s Market is characterized by more homes available than people looking to buy. This gives buyers more control over negotiations, allowing for requests to be made for additions and improvements. With more than 6 months of supply available, buyers can take their time searching for the perfect property.

Sellers may sometimes have to concede to a lower asking price, or throw in more incentives, giving buyers reason to choose their house. In this market, it is more important than ever for sellers to make repairs to their home to make it marketable to sell.

Cosmetic changes aside, if sellers ensure the home’s glaring issues are either fixed or negotiated, they will have better results when trying to get their home sold on time and for a good price. This is when marketing your home matters!

 

More Supply than demand

Seeking Balance

A balanced market is in the middle, about 4-6 months of supply, where homes are neither scarce nor overflow. Supply and demand is equal. properties are sold at fair market value. The market equalizes about once every ten to twelve years.

 

Opportunities during each Market

Seller’s Market

While this is the Sellers’ time to shine, buyers can benefit still. Right now in our Seller’s Market, interest rates are lower than they have been in several years. Though there is less inventory and more competition amongst buyers, now is a great time to buy or refinance your home, due to the historically low mortgage rates. Sellers can get top dollar for their homes and buyers can buy “cheaper” owing less interest on their loans than any other time is the last decade- now that’s a win-win!

Buyer’s Market

Buyers may prevail in this market, with inventory at their fingertips to choose from, but sellers can benefit from selling their home and buying cheaper than they could at any other time. In most cases, once you sell you have to buy again, so while it may take a little longer to get your home sold, you reap the benefits of buying a home below market value. If your home is in good shape and you have a great agent, selling shouldn’t be all that stressful. There’s a time and season to everything!

Balanced Market

Ah, the best of both worlds, right? During this in-between time, it seems all is right in the housing world. A buyer has his fair share to choose from and a seller can get fair market value for their home. This can lend to more stringent negotiations, but all in all everyone wins. There’s less pressure to snatch a home before it’s gone and prices aren’t “through the roof”. Take your time to figure out what you really want and have your agent negotiate for you. It’s a wonderful time to invest!

If you have any questions, contact us!