A Seller’s Market Versus a Buyer’s Market

Real Estate

The housing market is a recurring cycle. It can be affected by many factors, including economic conditions, interest rates, and consumer confidence, which can result in a surplus or shortage in housing. The imbalance in supply and demand of real estate can dictate whether it is currently a “buyer’s market” or a “seller’s market.” In this article, we decode what those two terms mean and how to know what cycle the market is in. 

What is a Buyer’s Market?

A buyer’s market refers to market conditions where the supply exceeds demand. Put simply, the number of properties on sale is higher than the number of interested homebuyers. The imbalance results in market conditions that favor buyers. When there’s an increase in inventory, properties stay on the market for a longer time period. As such, sellers may have to be more flexible on sale prices and may have to sell for less than they would expect.


If you’re looking to buy a home, it would be ideal to make your move in a buyer’s market. Rather than being in a series of bidding wars, you may be able to get a great deal on a home. Conversely, as a seller in a buyer’s market, you may have to make concessions or lower your listing price in order to secure a buyer in a timely manner.

What is a Seller’s Market?

Alternatively, in a seller’s market, the demand for buying a home is larger than the supply. This creates a market condition where the number of people shopping for homes exceeds the number of available homes on sale, favoring the seller. The supply and demand imbalance results in multiple offer situations for limited homes on sale, intense bidding wars, increasing prices, and shorter time on the market. If you’re a seller, this market condition gives you the upper hand because you get to set your listing price at market value or at the lowest price you’d accept for your home.


If you’re a buyer in the seller’s market, it’s important to understand that the seller has the advantage. There may be other interested buyers making an offer on the same property so trying to get a lower sale may not work in your favor. In fact, you risk losing the opportunity to buy the home if a higher offer is made by a competing buyer. If you are buying in a seller’s market, make sure that you have your financing in order, and make an offer in a timely manner. In some cases, seller’s markets are called renter’s markets when potential buyers keep renting until they save enough to compete with other buyers.

How to Determine the Market Conditions

The real estate market varies depending on the season. For instance, in the summer months - June to August- there are usually a lot more homes on sale than other times of the year. This means that a buyer’s market could be in summer and a seller’s market in winter. The market also depends on the area. Struggling economies will often create a buyer’s market while growing industries and a lot of available jobs will create a seller’s market.


One way to determine whether it’s a seller’s market or buyer’s market in your metro area is to look at inventory. If the number of homes for sale is high, it’s most likely a buyer’s market. Things change slowly so it may be hard to predict what the market will be with any accuracy. Sometimes you may have to wait months for things to change to your advantage. This is an important factor to consider when you want to buy or sell a property.

Buying and Selling in Different Housing Markets

Working with a local real estate agent who can come up with strategies for buying or selling a home at the best price may make all the difference. If you’re buying, they’ll know how to improve your chances of getting the best deal against other potential homebuyers, and if you’re selling, they’ll help to determine what price you can ask for. Working with an agent is key to coming out ahead in the real estate market.

 

Located in Lancaster PA and serving Central Pennsylvania, the Michael Stoltzfus Group works diligently to help home buyers and sellers achieve their home goals. With extensive experience and knowledge of the area and the market conditions, our team at the Michael Stoltzfus Group provides friendly and professional support for your entire real estate transaction.


Contact us online where one of our professional team members will respond via email or call us today at 717-380-3367.