When it comes to real estate, whether you’re thinking about selling or buying, it’s important to understand the difference between a buyer’s market and a seller’s market. You either want to get the most value for your money or the highest dollar for your home, so you’ll need to act accordingly depending on the market’s current state.
You’ll also need to beware that it could be a buyer’s market in one area and a seller’s market in the other. Even in the same state or region, there can be several different markets. Neither a seller’s or buyer’s market will last forever, but it can be hard to predict what the market will do with real accuracy, and things tend to change very slowly. If you’re waiting for it to happen, it can take years in some cases – it’s been primarily a seller’s market for more than a decade now, although things have started to shift. Experts have predicted that it would last until 2022 or 2024. However, in some places, it’s already ending, or will soon.
Whether you’re thinking about becoming a homeowner for the first time or you’ve gone through the process multiple times, purchasing a home in a seller’s market can be tough. A seller’s market occurs when there are more buyers seeking to purchase homes than there is available inventory. Seller’s markets give the power to the sellers, which allows them to ask more for their homes and it can even encourage a bidding war, benefiting the seller even more. The bottom line is that sellers have the upper hand with the odds in their favor that the property will sell quickly, and it may even sell above the listing price.
While it’s always a good idea to get pre-approved for a mortgage loan, in a seller’s market it’s more important than ever for the buyer to do so. While you can use a mortgage estimator to determine how much house you can afford, preapproval will provide a definitive answer and that letter from the lender will also show the seller that you’ve gone through the financial vetting process. When going against multiple other offers, which frequently happens in this type of market, you’ll have a better chance of it getting accepted and speed is the name of the game now.
When the availability of housing inventory exceeds the demand for houses, meaning there are more homes for sale than buyers who want to purchase a home, it’s a buyer’s market. Of course, this is good news for those who are hoping to buy, as it provides an advantage to the buyer rather than the seller. In this market, home seekers expect to find lots of inventory to choose from, along with some bargains too.
For those who hope to sell their home in a buyer’s market, it becomes more important than ever to ensure that it’s priced right. If it’s listed above what the value is during this time, it’s unlikely to sell, or at least anytime soon. A realtor that’s experienced in the community can conduct comparative market analysis so that your home will be listed at a price that’s competitive, helping it to sell faster and for the maximum price possible.