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As a whole, the United States has been experiencing one of the longest-running seller’s markets in its history. And good news for sellers: it doesn’t appear to be changing any time soon. But what does a seller’s market mean, and how is it different than a buyer’s market? Here’s a quick breakdown of buyer’s markets vs seller’s markets and what you can expect when selling your home.
What is a Buyer’s Market?
The number of homes for sale and the number of current buyers affect whether the market favors buyers or sellers. In a buyer’s market, there are more homes for sale than there are people to buy them.
This makes it a little harder for home sellers to compete in the market. Homes may sit on the market longer. Sellers may need to price their homes more attractively or invest in extra upgrades or repairs to win over buyers. Buyers may also ask for help with closing costs or other contingencies, which may lower your profits even more.
What is a Seller’s Market?
By contrast, a seller’s market is where there are more buyers than homes. Buyers often compete to ensure their offer is accepted, which can result in many offers being over the home’s listing price. Homes usually sell faster because there are more people looking to buy. Sellers often hold the advantage and tend to earn more on the sale of their homes.
How to Tell If You’re in a Buyer’s Market or Seller’s Market
If you have a real estate agent, they can tell you whether you’re in a buyer’s market or a seller’s market. But if you’re not at the point of reaching out to an agent, you can usually guess about the market’s state with fairly good accuracy.
Head to Zillow or a similar website to see homes for sale in your area. If many of them were recently listed and there aren’t a lot of old listings, those are signs of a seller’s market. Fewer homes for sale can also indicate a market that favors sellers.
However, if you see a lot of homes that have been listed for several months, that could be a sign of a slow market. You’ll likely see lots of homes for sale and the prices will be more attractive.
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How the Market Affects Your Home Sale
People have different priorities when selling a home. Some want to get top dollar for their home. Others need to sell quickly because they are relocating or found a different home they want, so they may price their home lower just to sell it fast.
Whatever your priorities, know that the market will impact how quickly you sell and how much you will earn. If you want to maximize your profit, for example, then it’s best not to sell during a buyer’s market.
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