There are two terms that are constantly tossed around when it comes to home buying, and those are the buyer’s market and the seller’s market. Each has a distinct effect on your quest to find your dream home, but many people are confused as to what each term means, and even how you can tell which kind of market you’re in. Discover the difference between a buyer’s market vs. seller’s market, what each term means, and how it affects your process of buying a house.
Understanding the Buyer’s Market
Put most simply, a buyer’s market is a situation in which the variables are in favor of the buyer. Home values tend to be lower, and sellers are more eager to get their properties off the market. This means you’ll have an easier time negotiating the sale price of your house and will have more leverage in negotiating extras, like repairs and upgrades to the property. Homes in buyer’s markets tend to be on the market for a longer period of time with lower interest rates from lenders.
Understanding the Seller’s Market
By contrast, a seller’s market is a period in which the market forces are in favor of the seller. There’s high demand — that is, lots of people looking for homes — and low supply. With not enough houses on the market to meet demand, prices tend to go up and these markets can be characterized by bidding wars where homes sell for higher than asking price or market value.
The difference is competition. In a buyer’s market, sellers are competing to get buyers. In a seller’s market, the buyers are competing to get homes. Home buying is more difficult while selling a home is easier. Interest rates can also be higher in this market environment, as more people are seeking loans.
Determining the State of the Market
Determining the state of whether the market is a buyer’s or a seller’s environment is really a matter of just doing research and watching what’s going on in the area you’re looking to buy. If you notice that there are a lot of homes for sale in a particular neighborhood, and they seem to be sitting on the market for a long time, you may be looking at a buyer’s market. Conversely, if houses go on the market and just as quickly come under contract, it’s likely a seller’s market.
There are advantages and disadvantages to both environments. If a community is in a buyer’s market, there may be other factors, including crime rates and devaluing of properties. If it is in a seller’s market can make it very hard to purchase a home. Your best bet to find a great house in a balanced market is to hire a realtor who knows the areas in which you’re looking to buy.
If you’re not sure what the market is like in your area and would like help from expert PV area real estate services, give Osterman Real Estate a call to get started today!
Are you interested in homes for sale in Paradise Valley AZ? Contact Thomas Osterman, an experienced Paradise Valley real estate agent. Call 602-466-1846 to speak with Thomas now!