Identifying a buyers or sellers market differs with each community. In one community, home sales might be sparse with short market time and the demand is high. A few towns over might see the opposite: plenty of 'for sale' signs and far less buyers.
Ten years ago when the housing crisis reached a fever pitch, there was far more of the latter. But markets always recover, and we've consistently seen home values on the rise. As homeowners begin to think about listing their homes, those on the hunt need to identify what type of market it is.
The difference between a sellers market and a buyers market
In a buyer's market, there is an excess of homes for sale with too few buyers. What usually happens is home sellers resort to dropping their price, oftentimes more than once, to attract buyers. In this market, the buyer has negotiating power due to the circumstances.
In a seller's market, demand for homes far outweighs the supply. Oftentimes factors other than the 'housing cycle' have an enormous impact on why it is a seller's market. Such a market is common where there are highly-rated, accredited school districts or perhaps communities which have made some type of advance:
- New or improved access to public transport to a major city
- The addition of a destination, such as a major shopping plaza
- A large, well known business relocates to a city
Greater Boston: A prime example
An excellent example of a sellers market is Greater Boston, 40 miles south of the Best Agent Today home office. In most communities around the city, property values have consistently escalated the last 10 years for a myriad of reasons:
- Boston has become the technology epicenter of the U.S., if not the world.
- General Electric recently located its largest plant to Boston; Facebook is opening a massive hub in nearby Cambridge.
- Public transport access to the city continues to expand, as far north as Portland, Maine, south as Providence, R.I., and soon to be Nashua, N.H., 40 miles to the northwest.
These are textbook examples of how outside economic forces effect the housing market.
Other signs of a sellers market
In a seller's market, it's the home seller that has the negotiating power as the buyers desire to relocate to a particular community is high. Homes are often sold even before they hit the market, and often elicit a bidding war. Other trademark signs include:
Few homes for sale: When touring a particular neighborhood with the above characteristics, you won't find too many 'for sale' signs.
High ticket homes: Since the homeowner has the upper hand, it's common for them to set a high starting price on their home.
Fast offers: As a home buyer in a seller's market, you need to have a clear idea of what exactly you want in a home, and how much you are comfortable spending. Having good preparation enables you to know quickly whether a home is for you -- and to act swiftly, beating other potential buyers.
Let a Best Agent Today Certified Top Producer identify your target market
Best Agent Today grants home buyers and sellers access to the top selling real estate agents in seven states as well as Las Vegas and Peoria, Illinois -- with access to more states and destination cities to be announced soon. Log on to BestAgentToday.com and plug in the zip code of your desired community to find the top agents.