When people decide to sell their home, very few consider if it’s a Seller’s or Buyer’s Market. Most people tend to see the home as a place to live in and not as an investment. However Supply and Demand (inventory) determine the real estate market.
Balanced Market
A balanced market has on average 6 months of inventory. This means if no homes come on the market, in 6 months all homes on the market would be sold. Typically this means that the mortgage interest rates are affordable and the numbers of sellers and buyers are almost equal. This market is normal without experiencing volatile swings.
Buyer’s Market
This is the best real estate market to purchase a home. Why? There are more homes for sale and buyers can get better deals.
Signs of a Buyer’s Market:
- Inventory is high compared to the previous month
- More than 6 months of inventory is on the market
- Sale prices are significantly lower than the asking price
- Fewer Buyers are purchasing
- Property prices are declining
- Homes are staying on the market longer
Seller’s Market
As a home owner you want to sell the home in a Seller’s Market. There are fewer homes for sale and many buyers are competing for your home. Most probably you will sell your home quickly. Buyers may waive the inspection and the appraisal and offer more than the asking price.
Signs of a Seller’s Market
- Inventory is low compared to last month
- Less than 6 months inventory
- More buyers are purchasing, resulting in higher closed sale numbers
- Prices are increasing
- For Sale signs are up just for a few days before the Pending or Sold signs are posted
For the last couple of years we had a strong Seller’s Market. Currently we have about 3 months of inventory; however the inventory started to increase.