It is important to understand whether we are in a buyer’s, a seller’s or a balanced market as this can help determine your strategy for buying or selling, and the corresponding price.
- A buyer’s market is when there are many more homes for sale than there are buyers. This creates an advantage for buyers as they may be able to take more time in their property search, have more inventory to choose from and at potentially lower prices.
- A seller’s market occurs when demand is high and there are fewer properties available for sale to meet the demand. This creates an advantage for sellers as they may be able to sell properties more quickly and competition from buyers may cause prices to increase above expectations.
- In a balanced market the market is relatively neutral. There aren’t volatile swings in the market and obvious advantages don’t exist for either buyers or sellers. Generally, in this market the number of buyers and sellers is fairly equal, prices are relatively stable and prices for both sales and active listings are similar.
Another way to understand the type of market is by looking at available properties in terms of months of supply on the market. For example, in a buyer’s market there are seven or more months of available supply, meaning it would take seven months for all the available properties to sell. In a seller’s market, the amount of available properties for sale would take less than five months to sell, and in a balanced market it would take between five and seven months.
We are currently experiencing a seller’s market and it has been this way for some time. What does this mean for you?
For buyers, there will be more competition to buy a home in today’s market. There will likely be more than one offer, if not numerous offers, on a property. This means we have to be very strategic in presenting our offer and to make it is as appealing as possible for the seller to accept. One way to do this, where possible, is to reduce the amount of clauses or subjects in the contract while still protecting your interests. This can be done by having an inspection done and having your finances in place before offers are accepted. It is also important to be clear on what you’re looking for so we can be prepared to move quickly in making an offer, since more than likely other buyers will be doing the same.
For sellers, you are in the driver's seat. Every month your home could be worth more in value. For example, a one per cent a month increase in prices would equate to $10,000 on a $1 million property. You will probably receive more than one offer and if your property is marketed properly you should be able to maximize its selling value relative to the high market demand. A caution in this is market is finding your next home, for if you sell before buying another, today’s limited inventory could pose a challenge.
In short, look at the monthly inventory to see where the market is as a way to determine which strategy to apply.
Please visit http://downiehomes.com/marketing-news.html to get an update on today’s market.