Knowing whether market conditions favor buyers or sellers will help you to improve your own position and navigate your transaction armed with pertinent information.
A seller’s market takes place when financial and economic conditions are positive. New employers are coming to town, there are plenty of jobs, workers are receiving bonuses and raises, and there’s a general sense of optimism that encourages people to buy their first home or move up to a bigger, better home. This creates demand for homes, higher home prices and often a shortage of available inventory. Entry level homes don’t last long on the market, eventually causing shortages for mid-level homes as move-up sales occur.
A buyer’s market reflects a receding economy, coupled with unfavorable financial conditions. Employers stop hiring and salaries stagnate. If major employers downsize or transfer local employees without replacing them, workers have trouble finding other employment. Confidence wanes, and sellers find less demand for their homes. Soon, inventories of homes for sale increase, bringing prices lower. A buyer’s market means buyers are cautious and expect sellers to lure them by presenting updated homes competitively priced.
Buyers' and sellers' markets can be as localized as a single street or neighborhood, a suburb, city, or a county. It’s all about the economy’s impact on demand.
Are you in a buyer’s or seller’s market? If you’re not sure, let's talk about the trends for your area and price range. Call me at 269-491-6761!
Berkshire Hathaway HomeServices Michigan Real Estate