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Buyers market vs Sellers Market

Written by Posted On Wednesday, 04 November 2020 19:14

Buyers’ market exists when the number of homes available exceeds the demand for numbers of house buyers trying to purchase.

The main thing you need to be aware of as a buyer in a sellers’ market is that you will need to act quickly and aggressively. The sellers have the leverage so they will be getting multiple offers near or above the asking price. They will want short closes, few contingencies, high earnest money, and a pre-qualified buyer.

You would know if it's a buyer’s market when there are more sellers than there are buyers. It is hard to know how many buyers one key metric is out there, of course, is to look at the absorption rate - which can be measured. This is how quickly it would take all homes presently listed for sale to sell, and assumes no new houses were put up for sale. The way that is usually calculated is by seeing how many homes sold in the past six months, and then get an average number per month - say it is 100 homes that are selling per month. Then you add up how many homes are presently for sale (including those under contract / pending sale, but not yet sold). You divide the number of listed homes by the average sales-per-month - in this case, it would be 600 homes divided by 100 sold on average per month, to get 6. That means that that if no new homes were put on the market, it would take six months to sell every home presently on the market. This is what you call “months of inventory.”

A seller’s market is when they're less than a six-month supply; 6–7 months of supply is considered a “balanced” market, neither a buyer’s market nor a seller’s market. But over 7 months of inventory is a buyer’s market. It varies wildly based on location, the best place to start is with your local rep for the inside scoop. Because sometimes some locations that are already in the sellers’ market will remain so for the foreseeable future for the simple reason that the housing supply is not keeping up with demand. Just remember to always use market value instead of asking price as your starting point.

To determine if it is a buyer’s market or seller’s market is to look at the supply or inventory of the home for sale. If the inventory is low, it is most likely a seller’s market if the inventory is high that is most the buyers’ market.

We are a reputable real estate investment company merely focusing on providing an easier way to “Sell My House Fast Houston” on the market. Visit our website for more tips and ideas.

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Tino Jaimes

Hi my name is Tino Jaimes, a local real estate investor in Houston, TX. 

www.sunrisehousebuyerstx.com

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