You may be thinking about buying a home and started asking around about what’s happening in the housing market. You want to be sure you aren’t making the wrong decision at the wrong time. And maybe you’ve heard different opinions or terms being tossed around that are a little confusing. Below are a few definitions to help get you started.
Buyer’s market definition: A buyer’s market occurs when there are more properties for sale than demand, which gives buyers more favorable conditions. This is defined as more than 6 months of inventory on the market at a time. Homes for sale can be on the market for several months before the right buyer comes along, and it’s more likely that the seller will be inclined to give in to concessions the buyer requests, such as paying for a new roof or covering closing costs, in order to get the buyer to the closing table.
Seller’s market definition: A seller’s market occurs when there are more buyers than properties available, leading to competition among buyers and examples such as bidding wars, buyers placing offers on properties sight unseen and buyers experiencing pressure to put more cash down to get a seller’s attention. A sellers market is typically defined as less than 3 months of inventory on the market at one time. This can drive prices up. You may see more instances of appraisal coming in low due to the dramatic rise in prices.
Balanced market: A balanced market is created when there is an equilibrium in the supply and demand of properties. This is defined as between 3 and 6 months of home inventory listed, depending on the area, at any given time. Because real estate tends to run in cycles, a balanced market is most often seen as a transitional period between a buyer’s market and a seller’s market, or vice versa.
The market is always shifting as the amount of buyer and sellers change. This can happen drastically or gradually over time. Just a few indicators you can follow to give you an idea of whats what:
- Days on Market
- Days of Inventory on Market
- Year over Year change
- Current Interest Rates
I am happy to discuss the current market conditions. Respond to this and I’ll get you accurate, up-to-date data.