You may have heard that the ideal time to sell the home in a seller’s market. But what is the difference between a seller’s market and a buyer’s market, and how can you tell the difference?
How to Tell What Type of Market Your Are Dealing With
Simply put, a buyer’s market is a market where there is an excess of homes with too few buyers, while a seller’s market is when there are not enough homes to meet the needs of buyers. In other words, a buyer’s market is a good time to purchase a home because there are more homes available than there are buyers, which means sellers will lower their prices in order to get their home sold. For the buyer, this results in getting a good deal. In a seller’s market, on the other hand, competition is fierce. Therefore, the buyer is likely to pay more in a seller’s market, making a seller’s market more profitable for the person who is selling the property
Exploring Market Impacts
A number of different factors can impact the type of market you are experiencing. The most obvious factor is the housing cycle, which may be different from one market to the next. Other factors that can affect the market include public transportation access, amenities, employment opportunities, and schools. In other words, markets that have recently added new or improved access to major cities via public transportation may suddenly transform from a buyer’s market to a seller’s market. The same is true if a major destination such as a shopping plaza, is added to the community or if a major employer comes to the community. Similarly, those markets served by a highly-rated school district may tend to be a seller’s market.
Recognizing a Seller’s Market
In a seller’s market, the person who is selling the home has the negotiating power. In fact, it is not uncommon for a home in a seller’s market to be sold even before it hits the market. Oftentimes, a bidding war may ensue. If you witness this happening within your market of choice, you are certainly experiencing a seller’s market.
If there are only a few homes for sale in the market, you are also likely to experience a seller’s market. Similarly, you may notice that the homes within the market have high asking prices. Since homes go quickly in a seller’s market, it is important for buyers to have a clear idea of what they want in their home as well as how much they are willing to spend. In this way, they can act swiftly when making an offer in order to beat out other potential buyers.
Clearly, if you are considering putting your house on the market, you will have the upper hand and will be able to command a higher price if you are in a seller’s market. As a buyer, purchasing a home while in a seller’s market is not impossible. It does, however, mean that you need to act quickly and be prepared to pay a higher price in order to get the home you desire.
To get a better idea of the current market and the best strategies to use when buying or selling a home, contact a real estate professional. At Keller Williams New York, we will provide you with the guidance you need to make the best decision to meet your goals.