For many people, the decision of when to purchase or sell a home depends on their general life circumstances – a growing family, relocating to a new job, downsizing for retirement – rather than simply waiting for the “right” time in the market to do it. And while the saying goes that there’s never a “right” time to do anything, when it comes to the housing market, there are two very different types of markets that can impact your process: a buyers’ market and a sellers’ market.
What Is A Buyer’s Market?
In the most basic terms, a buyer’s market is when more houses for sale than buyers to buy them. That means buyers have their “pick of the litter,” so to speak. Listing prices may be a bit lower – or homes will sell for below asking; houses may sit on the market a bit longer than a seller would like, and sellers might be more flexible with their concessions to get their homes sold faster. In this instance, the buyers tend to hold more negotiating power since the surplus of sellers are competing for the same small pool of buyers.
What Is A Seller’s Market?
A seller’s market, meanwhile, is the opposite. It means there are more buyers than there are houses on the market. In these markets, houses may sell for above listing price and spend a very short time on the market. Buyers are also more likely to be more competitive with their offers and may remove contingencies to make their offer the most attractive option to the seller. In essence, the sellers have more bargaining power in a seller’s market.
What’s A Neutral Market?
While it may be easy to determine if you’re househunting during a buyer’s or seller’s just by looking at the local listings, there’s actually a more technical way of making the determination. Look at the houses on the market and divide it by the number of homes sold in the last 30-day period. You’re in a buyer’s market if the result is more than 7. If it’s less than 5, then you’re in a seller’s market. And if it’s in between, then this is considered a neutral market.
In a neutral – or balanced – market, there’s a healthy amount of competition on both sides, and neither the buyer nor the seller holds a hugely outsized advantage. Homes are likely to sell for close to their list price, and the time on the market won’t be astonishingly short or worryingly long.
These neutral markets are the ideal time for both buyers and sellers to get into the market – especially if they’re going to be both buying and selling property during the time since they’re likely to get a solid deal on both sides of the transaction.
What Type Of Market Are We In?
The market is constantly shifting, but for the last few years, most of the country – especially the rural and suburban areas – have been experiencing a seller’s market as city-dwellers search for more space. However, rising interest rates are taking some buyers out of the market, and we’re seeing a slow trend back toward a more neutral market. While home prices are still on the rise, we see a much more steady increase – 2.7% yearly – than we were experiencing just a year ago when prices were skyrocketing, and homes were selling for tens of thousands of thousands of dollars over their list price.
If you’re ready to buy or sell property in the Greenville area, give us a call! We can help you find your perfect home and get the best price on selling your current property.