Buyer Market or Sellers Market?

Question: I was talking to my neighbor and he said he isn’t selling yet because it’s a Buyers’ Market. What exactly determines a Buyers or Sellers’ Market?

Answer:  During a Sellers market, homes sell quickly and sellers have a lot of pricing power. As a result, prices rise more rapidly than at other times. During buyers markets, homes may sit on the market for a while before selling, so sellers become more flexible and may even drop their prices. The market is determined by supply and demand.

In real estate, the relationship between supply and demand is calculated as “available inventory”. At the current sales price, how long would it take to sell the total number of houses available on the market? That is how the real estate industry measures inventory.

Longer inventory times are associated with buyers markets.  Shorter inventory periods are associated with sellers markets. At this time, many local markets are still in a buyers market, but not all. For example, a town that has high inventories and lower demand may still have homes that defy the usual formula for a buyers market. These homes that are priced right and are beautiful will usually sell rather quickly compared to homes that are overpriced or lack that wow factor.

Real estate is part of a business cycle and we all know that investment returns are cyclical. Real estate is just like any other investment, it has its ups and downs.

Here is some good advice: Give your home that wow factor so you can smile and enjoy it while living in it, and then, when you are ready to sell, that same wow factor will attract more buyers at a price that will make you smile even more!