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rawmn/Shutterstock September 27, 2022 Ben Luthi is a personal finance and travel writer who loves helping people learn how to live life more fully. His work has appeared in several publications, including U.S. News & World Report, USA Today, Yahoo! Finance and more. Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. The real estate market has two opposing sides: buyers, who want to keep their costs low, and sellers, who want to maximize their profits. Depending on the inventory of available housing, one of those sides might have bigger advantages — and greater bargaining power — than the other. Understanding the difference between a buyer’s market and a seller’s market can be tied back to one of the fundamental laws of economics: supply and demand.
What is a buyer s market
When there is a surplus of homes and low demand for them, you’re in a buyer’s market. Prices tend to go down in these conditions, because there’s less competition. Additionally, homes are likely to for longer, putting pressure on sellers to make during the negotiation process. How to navigate a buyer s market
Depending on which side of the fence you’re on, consider these tips for crafting a strategy in a buyer’s market. If you re a seller
Do you absolutely have to sell your place right now? If not, you might want to delay your listing until the market shifts. However, a buyer’s market doesn’t have to mean holding on to your home. Ask your real estate agent to suggest potential improvements and upgrades that might deliver a solid return on your investment. Small steps, such as hiring a service, can make your home stand out. And be sure to think about the . If you re a buyer
Pat yourself on the back — you’ve chosen a good time to buy. Take your time. Since there isn’t as much competition, you don’t need to feel rushed to make an immediate offer. Research comparable properties so you’ll know how to . Your agent can help guide you. Even if you can’t get a seller to come down on the price, for example, you may be able to get other benefits, such as repairs and additional .
What is a seller s market
If the supply of homes is not enough to meet the demand from buyers, you’re in a seller’s market. Home prices tend to go up in these conditions, as buyers compete for the few options that are available, and sellers are less likely to make concessions because they may receive . Also, homes tend to stay on the market for a shorter amount of time, making it easier for sellers to close and move on. How to navigate a seller s market
A seller’s market can feel overwhelming for buyers, and perhaps a bit too tempting for sellers. Follow these tips to make a deal that works for you. If you re a seller
You still want to make your home appealing to buyers, even if the competition isn’t as stiff. “Be diligent about preparing your home for sale,” says Holly Connaker, a real estate agent with Compass in Minnesota. “Just because it is a hot market doesn’t mean you should forsake purging, refreshing and normal maintenance. Buyers notice a lack of attention to details and will wonder what else has been neglected.” You may be able to price your home on the high side, but it’s important to check in your area to ensure you’re not asking for too much. “Don’t get too greedy, because it can backfire on you,” Connaker says. “If you price your home too aggressively for the condition it is in, it may not sell right away. When homes don’t sell quickly, buyers assume something is wrong with the home.” If you re a buyer
You may want to consider holding off until the market is more favorable for you. If you don’t have the option to wait, you’ll need to act fast. “Seller’s markets are easier to manage when a buyer is 100-percent prepared,” says Dylan Lennon, a Realtor with Mosaic Community Lifestyle Realty in Asheville, North Carolina. “This means having a ahead of time if financing is involved, being comfortable with the purchase contract so that it can be signed quickly before an offer is made and knowing what to expect during the .” Also, be ready to make an offer that’s higher than the asking price — you can bet other buyers will be doing the same. Just don’t get so caught up in a that you end up paying more than you can afford (or more than the house is worth). Additionally, be aware that your lender will likely only agree to a loan based on the property’s appraised value; if your offer is higher than that, you’ll need to come up with the difference. Don’t expect to get many concessions during the , either. If something in the home needs to be repaired, you may need to fix it yourself after closing.
The real estate market today
If you’re entering the real estate market in the , you’re likely seeing a cooldown of the raging seller’s market we’ve had for the past two years. While inventory remains low — particularly for affordably priced properties — rapidly are starting to balance out the market in many areas of the country. August 2022 marked the seventh consecutive month of existing-home-sales decline, according to . But we’re certainly not in a buyer’s market just yet: Median home sale prices are up 7.7 percent from 2021. How to determine what s happening going forward
Will the rest of 2022 continue to lean in favor of sellers? Or will the scales slowly but surely tip in the other direction? Looking ahead, here are some key indicators to help you gauge whether your area is leaning toward a buyer’s market or a seller’s market: Inventory: If you’ve house-hunted in the past, compare the current inventory of properties with what you’ve seen before. In general, the more homes that are available, the likelier it is that it’s a buyer’s market. On the flip side, fewer options generally weigh in favor of sellers. Recent sales: Take a look at some properties in the area that are comparable to the one you’re hoping to buy or sell. If they sold above asking price, it’s likely a seller’s market. If the price ended up below ask, it’s likely a buyer’s market. Days on market and pricing: The longer a home remains on the market, the more the seller may be willing to do to offload it. If a seller has recently of a property comparable to the one you want, it could be a sign of a buyer’s market. The same goes if the price hasn’t budged but the home has been on the market for a while. It’s not uncommon for sellers to ask for more than what the market is willing to pay, so as a buyer, you’ll want to review multiple properties to determine whether it’s a trend or an isolated occurrence. Local market trends: Consider the data and local . If you notice that prices have increased sharply in recent months, for instance, it could be a sign that you’re in a seller’s market. On the other hand, if prices have remained the same or gone down, buyers may have the upper hand. Evaluating all of these indicators can be time-consuming, especially if you’re not extremely knowledgeable about the housing market. Your best bet in this case is to who knows your specific area. Don’t just follow the national headlines about the overall housing market. Consider this range: According to Redfin, the average home in Denver stays on the market for , while the average home in Pittsburgh takes to sell. “Markets are hyperlocal and can vary wildly with price point,” Lennon says. “Buyers should work with a Realtor who has demonstrated selling experience in the price point they’re shopping in.” SHARE: Ben Luthi is a personal finance and travel writer who loves helping people learn how to live life more fully. His work has appeared in several publications, including U.S. News & World Report, USA Today, Yahoo! Finance and more. Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Related Articles