The right real estate market makes a big difference when you’re buying or selling a home. Find out here what a seller’s market is in real estate.
No matter what is happening in the world, one thing will always be true: people need a place to live. In the best and worst of times, people are going to be buying and selling their homes. This means that there are going to be natural variations in the housing market depending upon the current trends.
Sometimes an area will have a buyer’s market, and other times it will be a seller’s market. What is a seller’s market, exactly? Read on to find out!
What Is a Seller’s Market?
A seller’s market occurs when the demand for housing is greater than the housing available. This is, naturally, the opposite of a buyer’s market. A buyer’s market occurs when there is more housing available on the market than there are buyers.
In numerical terms, this is determined by the ratio of sales to listings. When the ratio is above 60 percent, then it is a seller’s market. When the ratio is below 35 percent, then it is a buyer’s market.
What Causes It?
There are a number of events that can turn a local real estate market into a seller’s market and vice versa.
If an area is experiencing rapid job and population growth, and the housing market can’t keep up with the demand, then you’re going to have a seller’s market. It can also occur when interest rates on mortgages drop, which make more people eligible to borrow. The same is likely to happen if the government offers special incentives or tax credits.
What Are the Signs?
You don’t necessarily need to know the exact listing to sales ratio to determine if you’re in a buyer’s market. All you need to do is hop on a real estate site and track listings to see how long they’re up before the house sells. If homes are selling within a few days, or are selling for well above the asking price, then those are pretty good indicators that you’re in a seller’s market.
Is There a Seller’s Market Right Now?
It depends!
Not all housing markets in the United States are the same. As a result, you’re going to have to do a little research. For example, if you see a report that states sales are up in the third quarter, then that might be an indicator that you are living in a seller’s market.
If you’re not sure how to determine the status of the market, you can always talk to an expert — a realtor — to get more statistical data and to get a feel for where the market is in your area.
Ready to Sell Your Home?
If you’re looking to sell your home, then you’re probably hoping that you’re selling in a seller’s market. Do your research on current market conditions and talk to your realtor to discuss whether you will be able to get the amount you want for your home. If the market isn’t where you want it to be, consider waiting until things pick up to put your home on the market.
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