Three Indicators That Can Tell You Whether It's A Sellers' Or Buyers' Market
You have probably heard countless pieces of advice on how to buy a home in a buyers' or sellers' market, but do you know how to distinguish one from the other? The following three indicators, among others, can give you a rough idea on the kind of market you are operating on:
The Size of Available Inventory
Inventory size is one of the top factors everybody should use when gauging the health of the real estate market. This is because, just like in other industry, the balance of supply and demand affect prices and seller's motivation. Therefore, you expect the sellers to be highly motivated if there seem to be more listings than interested buyers, and the converse is also true. You can afford to be picky if it's a buyer's market, but the sellers will not give you much room to wiggle if it's their market.
Actual Selling Prices
Secondly, you should also consider how much houses are selling for. Don't rely on listing prices because there may be discrepancies between listing and actual selling prices, and the latter is what you are really interested in. it might be difficult to get the information on your own, but your real estate agent will have the data handy. You can breathe a sigh of relief if housing prices tend to be on the decline compared to previous years, but you will have to tighten your belt if the prices are higher than they should be.
How Long Listings Stay on the Market
This is another indicator you can rely on, in addition to the above, to gauge how the prevailing condition of the property market. Although there are a few exceptions, buyers often get apprehensive when their listings take too long in the market. If listings are taking months on the market, you can expect a few incentives from motivated sellers such as discounts or offers to pay some of the closing costs.
However, if properties are flying off the shelf like hotcakes, then you will need to up your game to get the property of your dreams. For example, it may be advisable to go easy on your contingencies (on insist on the most important ones) so as not to put off sellers.
A realtor can always help you get a bargain irrespective of the condition of the market. For example, in a buyers' market, an agent can help you get the maximum incentives you can get from prospective buyers.