If you’re thinking about selling or buying a home, you may be wondering when the best time to do it will be. While you may be considering doing it during certain seasons like spring and summer, the real estate market itself has a much larger impact on supply and demand than the time of year does. Figuring out whether the market is near you is experiencing a buyer’s market or seller’s market is the best way to determine whether or not it’s a good idea to buy or sell a home soon. Keep reading to learn about the difference between the two and what each means for local property prices.
If you’ve noticed that it’s hard to find a home for sale in the neighborhood you want to live in and a large number of people want to buy houses there, you probably want to buy a home in a seller’s market. In a seller’s market, the demand for homes in the area is far greater than the supply. Because there are fewer houses on the market, multiple buyers will make offers on a single property, often leading to bidding wars and driving the prices up. If you want to sell your home, doing so in a seller’s market will allow you to price your home higher to maximize your earnings and ensure a quick sale. Often, sellers who put their homes on the market at this time receive a sale price higher than the original listing price.
On the other hand, buying a home in a seller’s market can be difficult. Because many buyers can be interested in the same home, it is almost impossible to get a lower sale price on a property. If you end up engaged in a bidding war, you may actually end up paying a higher price than you initially anticipated on a home. Ultimately, it’s usually best for buyers to save for a higher down payment and wait a bit longer to buy a home in a seller’s market.
As you can probably guess, a buyer’s market happens when the number of properties for sale is greater than the number of potential buyers. If you are in the market to buy a home, doing so during a buyer’s market is ideal. You can likely purchase a nice home at a lower price than what it is listed at, and significantly lower than in a seller’s market
Selling a home in a buyer’s market can be very difficult. Because there are a limited number of buyers, your house may be on the market for a long time. When you do find an interested buyer, they have negotiating power to lower the price, and you may have to make compromises to finalize the sale.
When buying or selling a home, determining whether or not you are doing so in a buyer’s market vs seller’s market is key to figuring out sale price and supply and demand. Talking to a real estate agent can help you understand what kind of market you are in.