The housing market, like most markets, is cyclical. These cycles can be greatly influenced by a number of factors, including interest rates, economic conditions and consumer confidence, which can create a shortage or surplus in housing. A seller’s market happens when there’s a shortage in housing or more potential buyers than homes. A buyer’s market, on the other hand, occurs when there is a surplus in housing or more homes for sale than buyers. A balanced market happens when there is the same number of homes for sale as there are buyers.
If you’re looking to buy (or sell) a home, it’s important to know which type of market you’re entering into. If you’re unsure, ask your real estate agent. Of course, selling a home in a seller’s market is optimal, as is buying a property in a buyer’s market. But people don’t necessarily have the luxury of timing their home sale or purchase to coincide with the most advantageous market. It could be quite likely, for instance, that you’d be buying in a seller’s market or selling in a buyer’s market.
Selling in a seller’s market is generally quick and easy. In a buyer’s market, with an abundance of properties sitting idle, you may want to do some legwork to help sell your home. There are a number of things you can do to improve your chances for making a sale. These include:
In a seller’s market, with fewer homes available to purchase and more buyers looking, you’re more likely to get several offers on your home. Here are some things you can do to help increase your likelihood for getting multiple offers:
With more homes for sale than buyers and potentially lower prices, a buyer’s market could be a great time to buy a new home. Before doing so, however, consider the possibility that home prices could continue to fall, meaning your new purchase might be worth less than you paid for it in no time. Of course, what goes down may eventually come back up. Still, if you wait for prices to drop even further, you might miss out on a great opportunity.
If you’re looking to buy in a difficult seller’s market, there are things you can do to improve your likelihood for success.
If you should find yourself in a bidding war with another potential buyer, try to not show your hand to them or the seller. Instead, try to figure out the seller’s trigger—such as a specific closing date that would work for them—and include that in your offer. This could potentially give you an advantage over other offers. Also, keep in mind that sellers prefer offers that have no conditions attached.
Contact your mortgage specialist or real estate agent for more tips to help you sell your current home or buy a new one in any type of housing market.
The strategies, advice and technical content in this publication are provided for the general guidance only and benefit of our clients. This publication is not intended to provide specific mortgage, financial, investment, tax, legal, accounting or other advice for you, and should not be relied upon in that regard. Readers should consult their own professional advisor when planning to implement a strategy to ensure that individual circumstances have been considered properly and it is based on the latest available information.
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