When it comes to purchasing a property, whether it’s your first time or your fifth, understanding the basics of the real estate market you’re currently in is critical to a successful transaction.

The health of the real estate market is a living, breathing thing that ebbs and flows alongside the health of the economy, with many different factors at play. As you likely already know to some degree or another, any fluctuations in the health of our economy can quickly cause the transactional favor of the housing market to change hands.

At some point in your life, you’ve likely heard people talking about the housing market being either a seller’s market, a buyer’s market, or balanced; here, we go over what exactly that means in an effort to help you better understand where you fall in today’s real estate market.

What is a Seller’s Market in Real Estate?

A seller’s market occurs when the demand for housing exceeds the available supply. This type of market condition makes it much easier for sellers to get what they are asking for their home, if not more. A limited housing market also means homes will usually sell faster and easier, as well as increase the chances of a bidding war.

When buyers are in a position where they have to compete for the home they want, they are much more likely to spend more, which of course, greatly benefits the seller. In these scenarios, buyers are in less of a position to negotiate and are more inclined to accept the home as it is, even for a high asking price.

What is a Buyer’s Market in Real Estate?

A buyer’s market is just the opposite of a seller’s market – making it the best time to buy a home.

In a buyer’s market, real estate listing prices are lower because there is less demand. When this happens, buyers have a lot more negotiating power and are much more likely to get the home they want at a good price without too much fuss (depending on the seller, of course.)

In these scenarios, homes tend to stay on the market longer, making sellers far more likely to accept proposed negotiations on price and conditional terms.

Additionally, a buyer’s market allows the buyer to take their time making a decision and comfortably shop around without feeling too much pressure. With these kinds of advantages, a buyer can really take their time and do some research while feeling confident in any interests they may have.

What is a Balanced Market in Real Estate?

A balanced housing market occurs when the supply and demand are relatively equal. In these scenarios, sellers are most often likely to accept reasonable offers and home buyers are less likely to spend outside of the home’s actual value.

This type of market condition doesn’t particularly favor the buyer or the seller. In a balanced market, homes tend to sit on the market for an average amount of time and typically sell for close-to-list prices.

Speak with an Expert Today

The housing market is influenced by many different factors, some of which include – inflation, mortgage interest rates, government assistance programs, employment, and the overall health of economies, both locally and nationally.

At the end of the day, the best way to ensure you’re making the right decisions and taking all of the right steps within the current housing market is to do your research and partner with an experienced real estate agent.

If you’d like to consult an expert on where you stand in today’s real estate climate, contact Key Realtors today at 281-454-4500.