Are you looking to buy a new home? If you have started your research, you may have stumbled into various phrases such as ‘buyer’s markets’ and ‘seller’s market.’ For someone with little exposure to the world of real estate, these phrases can be as confusing as an alien language. As realtors with decades of experience behind us, Frankel Realty has decided to help homeowners and home seekers to learn the difference between two of the most important of real estate terms.
What does it mean?
Let’s start with ‘buyer’s markets’. When there is more supply in comparison to demand that creates a buyer’s market. When it comes to real estate, there are certain periods of time when people put their homes for sale but they don’t get sold as fast. This could happen within a specific time frame or within a geographical location to create a buyer’s market in real estate.
A seller’s market is the opposite of this. When the demand is greater than the supply, a seller’s market is created. If you look at it in from a real estate perspective, when a specific town or neighborhood is highly in demand, but there aren’t enough homes or properties to cater to that demand, this creates a situation where sellers have the greater control.
Now that you know the basic definitions, it’s time to apply them to your real estate situation. Say you wish to sell a house; obviously, you’ll try to get the best return on your investment. The ideal type of market to sell a home is when a seller’s market is in effect. As the name suggest, a seller’s market is most beneficial to the seller as the low supply and high demand puts them in control of the prices. In other words, if you put your house on the market during a seller’s market, you will be able to get a higher sale price because buyers are willing to spend more money to get what they want.
A buyer’s market hands pricing control to those who wish to purchase a home. When the number of properties exceeds the demand, this allows buyers to pick and choose what they like at a lower price. In reality, when the demand is low, sellers have to make an extra effort to sell their properties as well as to settle for a lower price.
It must be noted that different types of real estate markets can exist within the same geographical location such as a city or state. A part of your research for selling or buying a house should include identifying the type of market that is most beneficial for you. Buyer’s and seller’s markets are quite dynamic and they are easy to identify because change happens gradually. When selling or buying your property consult the professionals at Frankel Realty.