Understanding Real Estate Housing Market
Thursday Aug 31st, 2017Share
Instability in the real estate market scares people – sometimes right out of moving. A better understanding of the market will help you choose the best time to sell or buy real estate.
The housing market, like most markets, has cycles. These cycles in the market are strongly influenced by a number of factors including interest rates, economic conditions and consumer confidence, which can create a shortage or surplus in housing.
Knowing the market is a crucial factor when selling or buying your home. Be sure to research the current market, or hire a real estate professional who understands its complexities.
Is it a buyer’s market or a seller’s market right now?
What’s a Buyer’s Market?
A buyer’s market – is a market in which conditions favor those willing to buy a property. This happens when more people are trying to sell their homes or rental properties than those who are looking for a home to buy.
A buyer’s market leaves buyers with a wide range of properties to choose from and little competition to struggle with. Buyer’s market is especially good for first-time home buyers or people just starting with real estate investing as it allows you to buy your dream property at a lower price.
How to know if it’s a buyer’s market now?
Features of a Buyer’s Market:
- More properties on the market than in past periods
- 6 months or more of inventory on the market
- Listed properties spending more time on the market
- Current listing prices below previous sales prices
- Lower overall closing percentage
- Falling average house prices
- Flourishing real estate ads trying to attract buyers
What’s a Seller’s Market?
A seller’s market – or a hot real estate market – is the opposite of a buyer’s market. This is when conditions are in favor of those selling a property. A seller’s market materializes when more people are trying to buy a property than those who are willing to sell at the moment. Of course, this must benefit the few ones who are looking forward to selling their home.
In a seller’s market buyers would be ready to pay a higher price than the listed one in order to secure themselves the property they want. It’s good for sellers as they are likely to make a quick sale at a higher-than-expected price.
How to know if it’s a seller’s market now?
Features of a Seller’s Market:
- Fewer properties on the market than in past periods
- 3 months or less of inventory on the market
- Listed properties spending less time on the market
- Current listing prices above previous sales prices
- Higher overall closing percentage
- Rising average house prices
- Less impressive real estate ads
- A stable number of sellers and buyers.