The Market is Shifting, What Does That Mean For You?

You may hear terms such as a "Seller's Market" or a "Buyer's Market" or a "Balanced Market"  what does that mean to you?

Housing markets are cyclical, and are affected by factors such as supply and demand, interest rates, consumer confidence, and economic conditions.

Seller’s market at-a-glance
More buyers than homes for sale
Prices tend to be higher because of increased demand
Homes sell quickly
More likely to be multiple offers on a home, which gives sellers negotiating power (and conditional offers may be rejected)

Buyer’s market at-a-glance
More homes on the market than buyers
Prices tend to be lower because of increased supply
Homes are more likely to sit unsold
Housing surplus can slow rising prices and even lead to price reductions
Buyers have more choices and more leverage to negotiate

A Balanced market is when we have 4 to 6 months of inventory (MOI) of homes for sale. That means if no other homes hit the market, it would take 4-6 months to sell all the properties currently available. Homes sell for reasonable amounts in balanced markets, relatively close to the asking prices. (Although the caveat here is that the asking prices must reflect that the market is shifting and priced more conservatively) 

Contrast that with seller’s markets, where inventory is limited, and new listings sell fast, usually above asking, or buyer’s markets, where there is an oversupply of active listings.

A balanced market is due to several factors, such as:

Interest rates on mortgages
Amount of new housing construction
Employment and immigration
The result is a balance between supply and demand.

So How Does This Effect You?

In a balanced housing market, buyers have more opportunities. They might look at five or six homes, maybe take a break for a couple of days, then go look at five or six more. That’s possible in a balanced market because homes aren’t flying off the shelf. Home inspections can make a bigger difference, and buyers are more likely to offer lower than asking to test the waters.

On the other hand, sellers need to do their due diligence to get their homes ready for sale.

You need to be aware of how your home stacks up against your competition, price, amenities, looks, and condition. If your house is well maintained, shows well and is priced right, it will sell. Buyers are well educated and are often watching the market very closely, ready to move when they see a good deal.

So a balanced housing market is a win-win for both sides.

If you would like to speak with a qualified Real Estate professional about your home or about how this market effects you and your buying power, give Katie, Sara or Kelsey a call today!!