When it comes to your local market forget about everything you’ve seen on HGTV because “real estate” is local. The best way to truly understand the state of the current market where you live is to get in touch with a trusted professional. So, I am here to offer you some insight into “supply and demand” by sharing a few of the most common “types” of real estate markets: buyer’s market, seller’s market and balanced market.
- A Buyer’s Market: When you hear someone talking about a buyer’s market, they are discussing the fact that supply currently outweighs demand. The market is saturated with listings, and a typical seller is at a slight disadvantage due to the fact that competition of similar properties is higher than normal. As a rule of thumb, this would be a great opportunity for a buyer to enter the market because it often means that you can be confident that you will not overspend on your purchase.
- A Seller’s Market: When we talk about a seller’s market we mean that the housing inventory is particularly low and that it might be a great opportunity for a seller to list their home. This is due to the fact that the competition for similarly priced homes is likely to be low. As a seller if you have made the necessary improvements and have priced your home correctly you may enjoy fewer days on market, more motivated buyers, multiple offers, and “above asking” sale price. On the flip side, if you are a buyer entering a seller’s market it means you may experience a few bumps in the road before getting an offer accepted. Here are a few things to keep in mind to help you avoid some of the challenges of buying a home in a seller’s market: a) Be prepared to act quickly once you’ve decided that the home you are touring is going to be your next home. b) Get pre-approved for your purchase! c) Present a clean offer with as few contingencies as possible, and be prepared to come up with any and all closing costs out of pocket!
- A Balanced Market: This refers to a market that favors both buyer and sellers, depending on the price point. At a lower price point the pool of buyers is larger than at a higher price point meaning that there will be more buyers competing for the same property. This means it may be more difficult to get your offer accepted, and as a seller, if your home is updated and priced correctly you can expect to receive a full price offer. Conversely, at a higher price point the pool of potential buyers is much smaller, inventory builds and buyers find themselves with quite a selection of properties to choose from, devaluing the demand for your listing. Both of these scenarios can coexist.
If you are relying on, online auto-evaluations OR “HGTV” to determine the state of your local market, you may be missing out on an opportunity to “win” in your own current market. If you are looking to either buyer or sell the best solution is to call your trusted professional and ask them what the market is like in your specific area.