In this enlightening episode of Southwest Florida Real Estate Insights, your host and seasoned Realtor, Billee Silva, delves into the intricacies of the real estate market, deciphering the differences between a buyer's market and a seller's market.
To learn more about Billee Silva:
www.SW-FloridaRealtor.com
Jones & Co Realty
(239) 247-2490
Billee Silva:
Hello, it’s Billee Silva with the Southwest Florida Realty Show.
In real estate, the market is tied to the basic economic rule of supply and demand, which determines if a market is a home buyer’s market or a home seller’s market. Sure, certain seasons might have more foot traffic than others, but the housing market can also vary drastically from neighborhood to neighborhood.
Whether you’re a home buyer or seller, it is important to understand the difference and how it affects you.
When supply exceeds demand, we see a buyer’s market. This phenomenon means there are fewer buyers than there are homes for sale. In this scenario, buyers have a bit of leverage. Competition is lower for a home, and the number of days on the market increases for listings. A buyer’s market can be determined by calculating the months of inventory. Anything more than six months is traditionally considered a buyer’s market. In a buyer’s market, home buyers have more leverage, which means buyers can be more choosy because of increased inventory and more opportunity to negotiate. As a home seller in a buyer's market, you’re going to need to be more competitive with your pricing to snag offers, focus on depersonalizing and decluttering your home to appeal to a wide range of buyers, and be prepared to acknowledge repairs. Often times in a buyer’s market buyers will ask for help with closing costs, a home warranty, or assistance with buying down their rate.
When demand exceeds supply, we see a seller’s market. This means there are fewer homes than there are buyers. In this scenario, sellers have the upper hand in negotiations. Buyers are hungry for homes, and there just aren’t enough to go around. Usually, the number of days on market is low and it’s not uncommon to be in a multiple-offer situation. A seller’s market can be very exciting for home sellers and realtors, but extremely frustrating for home buyers. As a home buyer, you’ll experience more intense competition and need to be prepared to make quick decisions and strong offers, sometimes even above asking price. As a home seller, you still need to be prepared in a seller’s market. While the market favors sellers, buyers still gravitate to well-prepared listings priced right, marketed effectively, and presented in the best possible light. These homes will stand out and may even sell quicker and oftentimes for more money!
We calculate the current housing supply by calculating the months of inventory. This is the number of months it would take for the current supply of homes on the market to sell, assuming homes keep selling at the current pace. Anything less than six months is traditionally considered a seller’s market.
Understanding the distinction between a buyer's and seller's market is essential for navigating the real estate landscape with confidence. Whether you're looking to buy or sell a property, recognizing the prevailing market conditions empowers you to make informed decisions and adapt your strategy accordingly. In a buyer's market, buyers hold the advantage with ample inventory and favorable pricing, while in a seller's market, sellers enjoy the upper hand due to limited supply and heightened demand. By staying attuned to market trends, consulting with knowledgeable professionals, and remaining flexible in your approach, you can position yourself for success in any market scenario.
As always, thank you for tuning in, and have a wonderful day!