If you’re contemplating when to put your house on the market it is very important to keep an eye out on the housing market to determine whether your local area is in a buyer’s or seller’s market. While certain seasons may be busier than others, the fluctuations within the real estate market have far more to do with the concept of supply and demand than they do with the time of year.
What is a buyer’s market?
A buyer’s market occurs when supply exceeds demand. Essentially, real estate inventory is high, and there are plenty of homes for sale, but a shortage of interested buyers. These conditions give buyers leverage over sellers.
In a buyer’s market, real estate prices decrease, and homes linger on the market longer. So, sellers must compete with each other in order to attract buyers. Typically, sellers will drop their asking prices to gain an advantage in the market. Furthermore, they are much more willing to negotiate offers to prevent buyers from walking away.
What is a seller’s market?
A seller’s market occurs when demand exceeds supply. So, there are many interested buyers, but the real estate inventory is low. Since there are fewer homes available, sellers are at an advantage.
In a seller’s market, homes sell faster, and buyers must compete with each other in order to get a property. These market conditions often make buyers willing to spend more on a home than they would otherwise. Therefore, sellers can raise their asking prices. Due to the shortage of housing, these conditions often lead to bidding wars. During bidding wars, buyers will make competing offers and drive up the price, typically above what the seller initially asked for.
When buying or selling a home, it helps to know where the market stands. As a buyer, you’ll want to purchase a home in a buyer’s market. But as a seller, you’ll be hoping that you list your house during a seller’s market.
However, regardless of the conditions in your area, hiring a real estate agent is the best way to navigate the housing market. Whether the market is strong or weak, you’ll want to have a leg up on the competition, and real estate agents have the knowledge and skills necessary to ensure that you do.