If you’ve been considering selling your home but remain uncertain about taking the leap, consider a critical factor: the current condition of your local housing market. Whether it’s a buyer’s market or a seller’s market significantly impacts the selling process, including the duration of the sale, the number of offers received, and the potential sale price.
Let’s explore how to know what kind of market you’re selling your home in.
Local Market Conditions
Buyers Market
During a buyer’s market, the number of homes available for sale exceeds the demand from buyers, creating a favorable environment for buyers (though less so for sellers).
In a buyer’s market, real estate prices tend to decline, and homes linger on the market for extended periods. Consequently, sellers find themselves competing with one another to attract potential buyers. Typically, sellers lower their asking prices to gain a competitive edge. Additionally, they are more open to negotiating offers to prevent buyers from losing interest.
Sellers Market
In a seller’s market, demand for homes exceeds the available supply. This situation benefits sellers, increasing the likelihood of receiving multiple offers, sometimes even above the initial asking price.
Further, homes sell faster, and buyers find themselves in fierce competition to secure a property. These market dynamics often prompt buyers to stretch their budgets, allowing sellers to raise their asking prices. Additionally, increased demand leaves buyers with limited negotiation power, making them more inclined to accept properties as-is.
The scarcity of housing in such conditions frequently results in bidding wars. During these intense bidding wars, buyers submit competing offers, driving prices well above the initial asking price set by the seller.
How to determine your current market conditions?
Check available inventory
The market conditions can be determined with what we call absorption ratio, the ratio of how long it will take the market to absorb the current inventory if no new homes get added to the market. You can also check the current number of available homes in the market. A larger inventory suggests that your local area is likely experiencing a buyer’s market. Conversely, if there are very few homes listed, it indicates a seller’s market.
To get a precise understanding of the inventory, find the ratio of currently available homes to the number of homes sold in the past twelve months. If the result exceeds seven, it’s a buyer’s market. If it falls below five, it’s a seller’s market. Any value in between signifies an equilibrium market.
Tips For Selling In A Seller’s Market
In a seller’s market, where sellers compete to attract buyers, it’s essential to understand how to generate interest in your property.
First Impressions Matter
A well-maintained property attracts more buyers. Ensure your home is in excellent condition by thoroughly cleaning and decluttering before marketing or showing it.
The Price is Right
Even in a seller’s market, pricing your home fairly is important. Consider setting your asking price at or slightly below the fair market value to attract interested buyers. Some sellers even list their homes slightly below the assessed value to encourage competitive bidding.
Evaluate Offers Carefully
Don’t only focus on the highest offer, check each buyer’s financial capability. Avoid unrealistic offers, attractive offers don’t guarantee they can secure the necessary funds.
Aim for a Quick Sale
The longer your home stays on the market, the more skeptical buyers become. Aim for a quick sale to maintain buyer interest. A shorter listing period gives you a better negotiation advantage.
Watch this YouTube short on how to quickly know what kind of market you are currently in:
Sellers hope for a seller’s market so there are fewer properties and competitive buyers. When you’re ready to take the sale of your property to the next level, engaging a seasoned local appraiser can provide you with a credible and impartial assessment of your home’s value.
In addition, understanding the condition of your local housing market is important to decide the best time to sell. No matter if it’s favoring buyers or sellers, each market condition calls for a specific strategy. Collaborating with a knowledgeable real estate agent who can navigate the market’s intricacies and ensure a seamless sale can make the whole home-selling process less stressful.
If you want to learn more about how to navigate the real estate market, follow Stacey Glenn on all social media platforms for more informative posts.