Several people have asked me “What’s constitutes a Buyer’s and a Seller’s Market?” With over thirty years of full-time real estate experience, I’ve witnessed this type of shifting market in the early 1980’s, and I’ve recently attended a seminar on this subject. Here’s a recap of the most common characteristics:
Sellers’ Market:
· Fewer properties on the market for sale.
· Multiple buyers bidding for the same property.
· Inventory consists of 4 months or less.
· Prices are driven up by the market.
Buyers’ Market:
· Many properties on the market for sale.
· Buyer’s have a wide choice of selection.
· Inventory consists of 6 months or more.
· Prices are driven down by the market.
When the current inventory takes an average of four to six months to sell, it’s considered a “Balanced Market.” This is a transitional period between the buyers’ and sellers’ market and is generally short-lived.
While condition and “staging” are always important with the sale of any home, it’s not quite as critical in a Seller’s market. Since the inventory is low, there are many more buyers who are willing use their imagination about replacing worn carpeting and repairing minor defects. They will view the property the way they want it to be. Pricing can be more liberal, due to the law of supply and demand.
In a Buyers’ market, pricing and staging are critical! There’s a large inventory to select from and buyers are looking for the best condition and the best bargain on price. Listing prices are either IN the market-range where buyers are viewing, or OUT of the market-range. If a property is OUT of the market-range, it will not even be seen by buyers, let alone receive an offer. The “market-range” is determined by properties which have SOLD over the past few months, not the current listing prices.
On the brighter side, if you’re a seller in this market and feel that you’re not getting the top price that you could have received a couple of years ago, you will also be a buyer in this same market, where you can generally negotiate for the best condition and the best price on your next home!
Sellers’ Market:
· Fewer properties on the market for sale.
· Multiple buyers bidding for the same property.
· Inventory consists of 4 months or less.
· Prices are driven up by the market.
Buyers’ Market:
· Many properties on the market for sale.
· Buyer’s have a wide choice of selection.
· Inventory consists of 6 months or more.
· Prices are driven down by the market.
When the current inventory takes an average of four to six months to sell, it’s considered a “Balanced Market.” This is a transitional period between the buyers’ and sellers’ market and is generally short-lived.
While condition and “staging” are always important with the sale of any home, it’s not quite as critical in a Seller’s market. Since the inventory is low, there are many more buyers who are willing use their imagination about replacing worn carpeting and repairing minor defects. They will view the property the way they want it to be. Pricing can be more liberal, due to the law of supply and demand.
In a Buyers’ market, pricing and staging are critical! There’s a large inventory to select from and buyers are looking for the best condition and the best bargain on price. Listing prices are either IN the market-range where buyers are viewing, or OUT of the market-range. If a property is OUT of the market-range, it will not even be seen by buyers, let alone receive an offer. The “market-range” is determined by properties which have SOLD over the past few months, not the current listing prices.
On the brighter side, if you’re a seller in this market and feel that you’re not getting the top price that you could have received a couple of years ago, you will also be a buyer in this same market, where you can generally negotiate for the best condition and the best price on your next home!
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