Buyer's Market Vs Seller's Market
WHAT IS A SELLER’S MARKET?
A Seller’s Market is a situation in which demand (the total number of buyers seeking to purchase properties) exceeds supply (the total number of available properties for sale), giving sellers an advantage over purchasers when negotiating the price and terms of the sale.
Seller’s Market: There are more buyers looking to purchase than homes listed for sale.
- Homes sell faster and spend less time on the market
- Buyers have fewer options and spend less time looking for homes
- Home prices increase and sellers receive multiple offers
- Sellers have stronger leverage over buyers when negotiating
WHAT IS A BUYER’S MARKET??
A Buyer’s Market is a situation in which supply (the total number of available properties for sale) exceeds demand (the total number of buyers seeking to purchase properties), giving purchasers an advantage over sellers when negotiating the price and terms of the sale.
Buyer’s Market: There are more homes listed for sale than buyers looking to purchase.
- Homes take longer to sell and spend more time on the market
- Buyers have more options and spend more time looking for homes
- Home prices are stable or dropping and sellers accept less than ask
- Buyers have stronger leverage over sellers when negotiating
HOW DO I EVALUATE WHETHER I’M IN A BUYER’S OR SELLER’S MARKET?
Buyers and Sellers can analyze two key variables:
Average Days On-Market (DOM)
This measurement shows the median age of real estate listings in your area. If houses are selling in your neighborhood in 10 days or less, it’s a strong sellers’ market.
Asking Price vs. Final Sale Price
Bidding wars can often erupt among buyers, which means sellers may enjoy a final sales price that’s over asking price. The final sales price is typically at least 10% higher than the asking price.