Whether you’re ready to buy or sell your home, it’s essential to have some knowledge about the real estate market. Experts say that after years of high demand for homes, it appears that prices have reached the limit of what buyers can afford, which is forcing sellers to lower prices.
Buyer’s Market vs. Seller’s Market
Did you know that the property market is determined by the supply and demand of homes, which dictates whether a buyer’s or seller’s market is in play? Traditionally, a balanced real estate market is depicted as six months of supply. This means it typically takes six months to sell all available houses at the current pace of sales. Less than six months gives the advantage to the seller thanks to more competition for fewer homes available. As the supply of homes on the market dwindles, sellers receive multiple offers and prices tend to move upward. In a seller’s market, there is more demand than supply, meaning more individuals are looking to buy a home than there are homes for sale. Typically, homes that are put on the market during this time are more likely to sell quicker than average and perhaps at a higher selling price.
In a buyer’s market, it’s the opposite: there are more houses for sale than there are actual buyers. Homes that are put up for sale during a buyer’s market often stay on the market longer than average, which means the sales price is likely to remain the same or decrease overtime on the market.
This doesn’t mean sellers should be discouraged that their house won’t sell. A buyer’s market means it’s important that a seller make sure the home is priced correctly and the house remains show-ready. By ensuring the price is appropriate and the home shows well, the seller increases the chance of a quicker sale.
Some variables affect the type of real estate market for your particular areas, such as location, price and the condition of the home. A house located in a desired city and neighborhood, kept in excellent condition, will always be at the top of the supply chain. Knowing your market supply is vital when you’re preparing to buy or sell a home. Let our team of professionals help you understand your market.