When you think of the real estate market you really think of it in terms of three categories. You have your sellers market, buyers market, and balanced market. Thank goodness at least something seems a bit more simple. Depending on what category we are currently in when you are buying or selling in the market, will determine what kind of challenges, outcomes, and potential profits or losses you have the potential to come across.
The Sellers Market – This occurs if the number of interested buyers exceeds the available supply. During this market, properties sell significantly faster, there are more offers on the table for a seller to consider, and most conditional offers are denied as the seller can demand a firm sale. Transactions move very quickly in this market, buyers also typically pay more for the home in order to outbid other interested buyers.
Buyers Market – In this market the opposite to the sellers market is true… In this market the number of available listings out ways the demand from buyers. Buyers have more negotiating power, properties tend to be on the market longer, and you will either see a stabilizing in the prices or a drop. It’s called the buyers market because in this market they have more control.
Balanced Market – This market works exactly how its sounds, its balanced. The number of buyers matches the available supply. You will see homes selling within a reasonable amount of time, fair priced offers. It’s a healthy market.
Being able to identify what stage the market is currently in will help you make better decisions entering the market and help you prepare for what to expect once you are in it.
