How can I find out if it is currently a buyer's or seller's market?
Whether you’re a buyer or a seller, you should be informed on the current (local) real estate market. Buying a home in a buyer’s market can make all the difference in terms of pricing, negotiating power for the buyer, as well as how long a home sits on the market. Because these factors are also important for you if you’re a seller, knowing when to list your home can make all the difference in your listing price.
What is a Buyer’s Market vs. a Seller’s Market?
A buyer’s market is described as when the supply (inventory of homes available for sale) is greater than the demand. In this case, the demand is the buyers who are looking to purchase a home. A seller’s market is just the opposite. In a seller’s market, there is a high demand (more buyers) and a lower inventory. This market favors sellers because they’re more likely to receive several offers due to the high demand. Many of those offers may even be above their asking price.
How can I Tell if it is a Buyer’s or Seller’s Market?
1) Inventory of Homes
In a buyer’s market, houses take longer to sell. In a seller’s market, the opposite occurs -- homes take less time to sell. The time it takes to sell is affected by the inventory. In order to determine market conditions in your area, you should check the inventory of homes available in your surrounding area. “We study the market constantly if the market has over seven months worth of inventory, it would be considered a buyer’s market. With high inventory, homes may sit on the market a little longer because buyers have more options to choose from. Having more options to choose from also gives buyers more buying power.” says Jonathan Campbell VP at DLP Realty.
2) Home Prices
Do your research in your market to see if sellers are lowering their asking price. If many sellers are cutting their prices, this would indicate that it’s a buyer’s market. If the prices of homes have been increasing in your market, this would attribute to a seller’s market.
A real estate agent can help you determine what kind of market you are selling/buying in by looking into marketing trends to help determine the market.
“A good Realtor will always pull comparables and keep an eye out on current trends to help their clients. Maneuvering around in any kind of multiple offer situation can always be tricky, which is why hiring professionals who do this daily are the best way to get the most for your dollars,” says Melissa Woodruff, Sales Solutions Coordinator at DLP Realty.
At DLP Realty, our clients are always our top priority. We aim to provide extraordinary value to anyone who would like to put their home on the market, or anyone who aspires to move into their dream home.
3) Interest Rates
Higher interest rates make being a homeowner less affordable and as a result, may cause aspired buyers to shy away from purchasing homes until the market favors them. Follow the rise or decline of interest rates to see what kind of market you may be in. If interest rates are expected to decline, this may be the time to shine for home buyers. In 2018, interest rates have climbed steadily. This year, interest rates are projected to continue to rise. Consequently, this means higher mortgage payments.
Home buying/selling is more complex than it may seem. A home’s value this year may be completely different than its market value the following year, so it’s important to reach out to DLP Realty and get a free market analysis of your home.