Similar to other markets, the housing market follows a cyclical pattern that can be significantly impacted by various factors such as interest rates, economic situations, and consumer sentiments. These factors can lead to either a shortfall or excess of housing. A shortage of housing or a higher number of prospective buyers than available homes results in a seller’s market. Conversely, a buyer’s market arises when there is a surplus of housing or more properties on the market than potential buyers. A balanced market is characterized by an equal number of homes for sale and buyers.
When there are more prospective buyers than available homes for sale, prices usually rise due to the heightened demand. In such a scenario, homes tend to sell rapidly, and there is a greater likelihood of multiple offers on a property, giving sellers an advantage in negotiations (and potentially rejecting conditional offers).
When there is an excess of homes on the market compared to the number of prospective buyers, prices tend to decrease due to the higher supply. In such a situation, homes may remain unsold for longer periods. A surplus of housing can hinder the rise in prices and even cause price reductions. Buyers have a wider range of options and are better equipped to negotiate deals in such a market.
It’s crucial to identify the type of market you’re entering when buying or selling a property. If you’re uncertain, seek advice from your real estate agent. While it’s ideal to sell a home in a seller’s market or purchase a property in a buyer’s market, people may not always have the opportunity to align their sale or purchase with the most advantageous market conditions. For instance, you may find yourself buying in a seller’s market or selling in a buyer’s market.
Selling a property in a seller’s market is typically a swift and effortless process. However, in a buyer’s market, where numerous properties are sitting idle, you may need to take some steps to enhance your chances of making a sale. The following actions can help:
In a seller’s market, where there are fewer homes available for purchase and more buyers looking, it’s probable that you’ll receive multiple offers for your property. Here are some actions you can take to increase your chances of receiving several offers:
When buying a new home in a challenging seller’s market, there are several strategies you can use to increase your chances of success:
If you happen to be in a bidding war with another prospective buyer, it’s advisable not to reveal your hand to either the seller or your competitor. Instead, try to discern the seller’s trigger, such as a specific closing date that would work for them, and include it in your offer. This could potentially give you an edge over other bidders. Additionally, remember that sellers favor offers with no conditions attached.
For more advice on selling your current home or buying a new one in any type of housing market, reach out to your mortgage specialist or real estate agent.