Understanding a Buyer's Market or Seller's Market
How a Buyer's or Seller's Market is determined
A Seller's Market is when the supply of homes for sale exceed the number of Home Buyers. This is determined by the Absorption Rate which can determine if the current market condition are a Buyers Market or Sellers Market. Your Real Estate Agent can determine the current market by dividing the number of Homes for Sale in an area by the number of homes Sold in a 30 day period. This number will determine the Absorption Rate. A good example would be if in an area there are 100 homes on the market and in a 30 day period 25 home sold. The absorption rate would be months of inventory. Or if nothing new came on the market and homes continued to sell at the same rate in four months the inventory would be depleted. An Absorption Rate of 1 to 3 months of inventory is a Seller market, 3 to 6 months of inventory is a balance market and 7 or more months of inventory is a Buyer's Market.
Buying a home in a Seller's Market can be difficult with all the competition. Many of the Home's for Sale tend to be on the market a shorter amount of time and receive multiple offers. But with a skilled Real Estate Agent they can advise on ways to make your offer stand out from the other's. To make the offer to purchase stand out it should be substantial. Many time contingency's can affect the offer (having to sell a home to purchase the new one, delayed closing date, asking for repairs before the home is under contract, asking for appliances that normally do not convey, not having a pre approval letter from a lender) can weaken the offer. Again a skilled Real Estate Agent can help with decisions to improve your offer.
When purchasing a home in a Buyer's Market the future homeowner can be more selective. Homes tend to be on the market longer and sell for at or below list price. Many times a home seller will offer incentives to a potential homebuyer such as paying some allowable closing costs, paying HOA transfer fees, including home warranties or include furniture or appliances. Here in Central Texas it has been a number of years since we have experienced a Buyer's Market. Because of the large influx of people moving to the area it may be a while before the next Buyers Market.
Buying or Selling a Home
If you are Buying or Selling a Home it is highly recommended to hire a local Real Estate Agent who can help you guide you through the process. Someone who has your best interest and will work hard getting you the best possible deal. For more information about Buying or Selling a home in Central Texas contact Allen Deaver of Asset Realty today.