A buyer’s market is a term used in real estate where there are more properties for sale than there are buyers interested in purchasing them. In the Colorado Springs market, that is when there are over six months of inventory. (Months of inventory means how many months it would take to sell the homes currently listed on the market.)
In a buyer’s market, buyers have the advantage because they have more bargaining power because of the abundance of available properties. As a result, sellers may have to lower their prices or make other concessions in order to make a sale.
In a buyer’s market, there is a high inventory of homes for sale. In addition, for whatever reason, buyers are not as much in a hurry to purchase. This is evident in a market when interest rates are rising rapidly and buyers are waiting for rates to come down.
The number of days a house sits on the market increases to several months. Prices will sometimes come down in a buyer’s market. Sellers tend to be more negotiable and more willing to respond to inspection items.
The good news for buyers is there is less competition for properties. A buyer’s market can be an advantageous time for those looking to purchase a property. There are more options and greater leverage when negotiating with sellers.
Buyers are in the best bargaining position in a buyer’s market. They can often negotiate better deals and terms when purchasing a property.
A seller’s market is a term used to describe a situation in the real estate market where there are more buyers interested in purchasing properties than there are properties available for sale. In a seller’s market, sellers have the advantage because they have more bargaining power due to the high demand for their properties. As a result, buyers may have to compete to purchase a property, which can drive up prices and result in bidding wars.
The biggest key to a seller’s market is the low inventory of homes for sale. If there are less than five months of inventory, it’s considered a seller’s market.
The result is more buyers looking to purchase homes because there are so few available. Houses sell quickly and often have multiple offers within the first week of being on the market.
Because of the increase in competition among buyers (like we saw strongly in 2021), sellers may price their homes higher and be less negotiable in accepting offers or making repairs.
A seller’s market can be an advantageous time for those looking to sell a property. They may sell their property quickly and for a higher price. However, it can be a challenging time for buyers who may need to act quickly and may face stiff competition from other buyers in the market.
A balanced market is when there are five or six months of inventory available for sale. That means there is a balance between available homes and the number of buyers looking.
When Is The Best Time to Sell a House?
My response to this question, whether for Buyer or Seller, is almost always, “when you need to sell, or when you’re emotionally and financially ready.” The decision to buy or sell a home is personal.
The timing of when to sell a house can depend on a variety of factors. Family circumstances, the current state of the housing market, and local economic conditions can all influence timing.
If you’re trying to time the market, it’s typically a good time to sell when there’s a high demand for homes but a low inventory of properties. This can drive up prices and lead to faster sales. Consult with a local real estate agent to get a sense of the current state of the housing market in your area.
When you’re ready, make sure your home is in good condition and doesn’t require significant repairs or upgrades. It may be a good time to sell as buyers are often willing to pay more for move-in ready homes. On the other hand, people looking for a deal are clamoring for homes that are not picture perfect.
Realtors will often tell you the spring and summer months are the best time to sell. The weather is nicer and more people are actively looking to buy. My response to that is, yes, but people have to move all year long. Don’t let the season put undue influence on when you’re ready to move.
If you’re anticipating a major life change, such as a job relocation, a new addition to the family, or retirement, it may be a good time to sell your house and move on to the next chapter in your life.
- Buyer’s market = six months or more of inventory
- Seller’s market = less than five months of inventory
- Balanced market = five or six months of inventory
Ultimately, the decision to buy or sell a house should be based on your unique circumstances. It’s important to consider your options and consult with a professional. A local real estate agent can help you make an informed decision. With decades of local experience, I’d be glad to speak with you about your individual real estate situation.