How Can You Tell If Is It a Buyers or Sellers Market?

By: ROS Team

Whether you’re a seasoned investor or a first-time homebuyer, navigating the real estate market can feel like a rollercoaster. Understanding if it’s a buyer’s or seller’s market is crucial for making strategic decisions.

In a buyer’s market, you might find more favorable deals and negotiation power. Conversely, a seller’s market can mean fierce competition and higher prices. But how do you identify the current market climate?

Don’t worry, we’ve got you covered. This guide will equip you with the key factors to watch and the knowledge to confidently assess the market in your area.

What Is A Buyer’s Market?

A buyer’s market is a situation in real estate where there are more homes for sale than interested buyers. This gives buyers the upper hand, as they have more choices, potentially lower prices, and more room to negotiate with sellers who are eager to sell their properties.

What Is A Seller’s Market?

A seller’s market in real estate happens when there are more interested buyers than houses available. This creates a competitive environment where homes sell quickly, often above asking price, and sellers have the upper hand in negotiations. Bidding wars are common, and buyers may have to waive contingencies to make their offer more attractive.

Buyers Market vs Sellers Market: What’s The Difference?

Aspect	Seller’s Market	Buyer’s Market
Supply and Demand	High demand, low inventory	Low demand, high inventory
Pricing	Prices tend to rise due to competition	Prices may stagnate or decrease due to surplus
Negotiation	Sellers have more negotiating power	Buyers have more negotiating power
Time on Market	Properties sell quickly, often in days or weeks	Properties may linger on the market for months
Competition	Multiple offers on properties are common	Fewer offers on properties
Conditions	Sellers may receive offers above the asking price	Buyers may negotiate below the asking price
Inventory	Limited options for buyers	Wide range of options for buyers

How Can You Tell If It’s A Buyer’s Or Seller’s Market?

There are a couple of key factors to watch out for to determine if it’s a buyer’s or seller’s market in your area:

1. Inventory levels

A high number of homes for sale compared to recent buys (over 7 months’ worth) means a buyer’s market. Few homes selling fast (under 5 months’ worth) suggest a seller’s market.

2. Sale prices

Homes selling at or above list price signal a seller’s market. In a buyer’s market, homes may take longer to sell below the list price.

3. Days on market

This shows how long a home stays for sale before it sells. In a buyer’s market, homes linger for weeks or months. In a seller’s market, homes sell very fast, often within days of listing.

4. Real Estate Agents

Local agents know the current conditions in your area. They have recent data insights. They can tell if it’s better for buyers or sellers.

Tips for Sellers in a Seller’s Market

Price Strategically: Aim for a competitive price to spark bidding wars, but avoid overpricing that deters buyers.
Prepare for a Fast Sale: Have paperwork ready and plan your next move beforehand.
Highlight Curb Appeal: Make a great first impression with a clean, well-maintained exterior.
Stage your Home: Depersonalize and declutter to showcase the space and its potential.
Consider Waiving Contingencies: Be flexible on inspection or repair demands to attract stronger offers.

Tips for Buyers in a Seller’s Market

Get Pre-Approved for a Mortgage: Knowing your budget beforehand allows for quick and competitive offers.
Be Flexible: Accommodate showing times and potentially move-in dates to stand out.
Act fast and Decisively: Don’t hesitate to put in an offer if you find the right house.
Consider Offering above Asking Price: Be prepared to go above the asking price, but stay within your budget.
Put an Escalation Clause on your Offer: This automatically increases your offer in pre-determined increments up to your maximum limit, competing strongly without overpaying.
Waive Contingencies Strategically: Consider waiving some inspections or repairs to make your offer more attractive, but weigh the risks involved.

Tips for Buyers in a Buyer’s Market

Do your Research: Know comparable property values to make fair offers.
Be Patient: Take your time to find the right house without rushing into a decision.
Negotiate Confidently: Don’t be afraid to make offers below asking price, backed by your research.
Consider Fixer-Uppers: You might find good deals on houses that need some work.
Get Pre-Approved for a Mortgage: Show sellers you’re a serious buyer.

Tips for Sellers in a Buyer’s Market

Price Competitively: Research similar properties and set a realistic asking price to attract buyers quickly.
Enhance Curb Appeal: Make a strong first impression with a clean, inviting exterior and landscaping.
Stage Strategically: Declutter and highlight the home’s best features to make it appealing to a wider audience.
Offer Incentives: Consider covering closing costs or offering a home warranty to sweeten the deal.
Be Flexible with Showings: Accommodate buyers’ schedules to increase interest.
Market Effectively: Use high-quality photos, virtual tours, and targeted online advertising to reach more buyers.

Is It a Buyers or Sellers Market 2024?

The 2024 housing market is in a state of flux, with some indicators leaning towards a seller’s market and others suggesting a shift towards buyers. While inventory remains low (around 2.9 months supply nationally as of April, 2024, pushing the market in favor of sellers, rising mortgage rates (averaging 7.05% for a 30-year loan in April, 2024) are dampening affordability and buyer enthusiasm. Experts predict a gradual increase in listings this year, potentially leading to a more balanced market but not necessarily a full-blown buyer’s market yet.