Whether you’re buying or selling a home, market trends can significantly influence the value of a property and how quickly you can close a deal. If you’re unfamiliar with market trends, we’ll go through what it means to you to be in a buyer’s vs. seller’s market and some tips to help you navigate each.
What Is a Buyer’s Market?
A buyer’s market is when the leverage of negotiation generally lies with the buyer, not the seller. In a buyer’s market, there is a surplus of homes and properties available and a dampened demand for them. Of course, there are always exceptions, and it doesn’t instantly mean that buyers have the upper hand in negotiations, but typically this means lower housing prices.
What Does a Buyer’s Market Mean for Homeowners?
If you’re a homeowner looking to sell in a buyer’s market, you’ll face more challenges than in a seller’s market. A good home is a good home, and the market doesn’t dampen its quality, but a buyer’s market typically means less competition among buyers.
The home will likely stay on the market longer, and homeowners may have to make more concessions than they’d like to during negotiations. However, even in a buyer’s market, a quality home will still fetch a fair price—it just might take a bit longer.
What Is a Seller’s Market?
As you may guess, a seller’s market is the inverse of a buyer’s market. The demand for homes is higher than the supply, driving housing prices up. Houses for sale in a seller’s market will go faster and are more likely to attract multiple bidders; it’s common for a home to sell above the asking price in a seller’s market.
What Does a Seller’s Market Mean for Homeowners?
For homeowners looking to sell their house, a seller’s market is the ideal time to do so. With the increased demand and low supply, a home is more likely to produce a bidding war.
With multiple parties bidding on a house, the price is likely to go up, and homeowners can get well above what they initially asked for their home. With the increased demand, houses sell faster, too, meaning homeowners can get through the selling process much quicker.
How To Know if You’re in a Buyer’s or Seller’s Market
We know the difference between a buyer’s and seller’s market, but how can you tell which one we’re in? In a macro sense, we might know if the country is in a buyer’s or seller’s market, but each region can be different, with some areas being more beneficial for buyers and others for sellers.
If you notice more For Sale By Owner (FSBO) signs in your area, it’s a likely indicator that you’re in a seller’s market. If homeowners don’t feel the need to use an agent to sell their home, that could mean the demand is so high they can probably sell it quickly without the help of an agent.
If you keep tabs on the housing market and notice homes are selling quickly—and over the initial asking price—that’s a sure sign your area is a hot seller’s market.
Tips for Navigating a Buyer’s Market as a Buyer
Your strategy for buying homes can change depending on whether you’re hunting in a buyer’s or seller’s market. If you’re looking for a new home in a buyer’s market, keep these simple tips in mind to get a home that fits your needs and budget.
As a buyer in a buyer’s market, you’ve got the upper hand and, typically, more time to decide. With a surplus of homes and lower demand, houses are more likely to stay on the market longer than usual, giving you more breathing room to decide.
You don’t want to rush into any decision you’re not 100 percent sold on in a buyer’s market. You also don’t want to dawdle, but there’s less pressure to make an immediate decision, so use that to your advantage.
See as Much as Possible
Since you usually have more time for making decisions in a buyer’s market, it’s wise to use that time to see as many other homes and properties as possible. In a seller’s market, a home can be sold in no time; in a buyer’s, you can take sufficient time to look at all the options available.
If you’re so inclined, look at other homes and properties before deciding to make an offer. It’ll give you a better opportunity to find what you’re looking for and even help with negotiations later when you know what else is on the market.
Tips for Navigating a Seller’s Market as a Buyer
In a buyer’s market, buyers have the upper hand, but what about in a seller’s market? In this market, sellers have the leverage, but there are still many ways to get the home you’re looking for at a fair price.
As a buyer in a seller’s market, time is of the essence. There will be many buyers vying for a limited number of homes, so you’ll want to act fast.
It may be scary to make such a big decision so quickly, but if you don’t act fast, other bidders can get involved and it can turn into a bidding war—pricing you out of the home of your dreams. You’ll want to have your financials in order before you even begin house hunting and come in with a solid initial offer so you can close the deal as fast as possible, keeping other bidders away.
Don’t Give Up
Along with acting fast, you’ll also need to be patient. It may seem like a contradiction, but as a buyer in a seller’s market, you will probably not get the first home you want.
It’s common for buyers to put offers on multiple houses over so many months and not close on any of them. It can be frustrating and disheartening, but you don’t want to give up and settle for a home you’re not enthusiastic about.
Stay patient, don’t give up, and keep your eyes and ears open for the next home that can provide everything you need. There’s a quality home for everyone, even in a seller’s market.
Hopefully, this guide will help you better understand the differences between a seller’s and a buyer’s market and what they mean to you. At 30A Local Properties, we can help you navigate whatever state the market is in and find you something that fits you, whether it’s Alys Beach, Florida real estate, or anywhere else along the 30A!