How To Understand the Housing Market ?

The housing market, like most markets, is very cyclical. These market cycles can be greatly influenced by a number of different factors. Some of these factors include interest rates, economic conditions and consumer confidence, which can lead to a shortage or surplus in housing.

A Seller’s market happens when there’s a shortage in houses or more potential buyers than homes. A Buyer’s market, on the other hand, occurs when there is a surplus in housing or more homes for sale than buyers. A Balanced market happens when there is an equal number of homes for sale as there are buyers.

If you’re looking to buy (or sell) a home, it’s important to know which type of market you’re entering into. If you’re unsure, ask your real estate agent.

Let’s Look at the key Differences between a Buyers, Seller’s & Balanced Markets…..

Buyers Housing Market

Indicators of a Buyer’s Market include:

Demand is Lower
Inventory is Higher
Longer List Time/High Number of Days on Market (DOM)
Fewer Offers
Lower Offers
Price Reductions

Seller’s Housing Market

Indicators of a Seller’s Market include:

Demand is Higher
Inventory is Lower
Shorter List Time/Low Number of Days on Market (DOM)
Multiple Offers
Homes Selling Above List Price

Balanced Housing Market

Unlike a Buyers or Sellers Market, a Balanced Market is when there is an equal number of Buyers and Seller’s.

In a balanced market, sellers usually accept reasonable, close-to-list-price offers. While homes sitting on the market for an average or typical length of time (this can vary from market to market). In a balanced market, house prices remain stable and, for buyers, there is a usually a sufficient number of homes to compare and choose from.

If you have any other questions regarding the different types of markets please feel free to reach out to us at [email protected] or 778.888.6566.