What You Need to Know About the Buyer’s and Seller’s Market

A guide to understanding the buyer’s and seller’s market.  This is What You Need to Know About the Buyer’s and Seller’s Market

The terms, buyer’s market, and seller’s market are tossed around often when talking about real estate, but what do they mean? It’s important to understand the terms in order to determine the actual differences between them.

A buyer’s market refers to an economic situation when good or funds are high and buyers can get more for their money; in other words, prices are low and the market is benefiting people who are buying the services, product, or real estate.

On the other hand, the term seller’s market refers to an economic situation where services, products, or real estate is scarce so sellers can keep prices high, making a larger profit.

Buyer’s and seller’s markets are constantly going back and forth and the nature of both can be applied to any kind of business. However, buyer’s and seller’s markets are most apparent in the real estate industry. In terms of differentiating the two, both are important to understand.

Home Marketing

Home marketing is very different from other kinds of marketing. Home marketing requires complex strategies in order to sell a home; this is because homes are one of the most expensive things that people can buy so the marketing strategies have to be outstanding.

In a buyer’s market, realtors and homeowners, otherwise known as the sellers, need to make a home stand out in order to sell it. In a seller’s market, sellers, however, don’t have to focus on marketing and advertising as much and have a little bit more leeway. The difference between a buyer’s and seller’s markets is significant. Here is what you need to know about home marketing and the differences between the buyer and the seller:

Expectations

Buyer

Potential homebuyers expect to find plenty of homes valued at a good price. They do not expect to pay a lot of money for a property and will be turned off by a property with a high asking price.

Seller

Potential homebuyers expect to pay top-dollar and to negotiate and/or compete with other potential buyers. They also know they are paying a premium so expect that their purchase will show that.

Sellers can also manipulate the selling market slightly by staging a home in an attractive and practical way. A deck builder in Cherry Hill added, “Because the buyer’s market is heavily dependent on inventory, it’s important that the home looks like it is worth it. Touching up or staging areas can add to the housing market on a small, but relevant scale.”

Power

Buyer

Buyers have more power in the buyer’s market because there is more inventory at a lower price.

Seller

In the seller’s market, sellers have the upper hand because they can mark up the prices on a home and have the power to encourage bidding wars between potential buyers. It’s still important however for sellers to offer a fair asking price that is fitting for the home; if the price is too outrageous, buyers will obviously look to other sellers.

Inventory

Buyer

A buyer’s market is dependent on if the inventory is high. If there are a lot of homes for sale, the buyer has more of a choice as to where they want to make their investment. Similarly, the inventory is largely based off of what kind of shape the house/homes are in.

Seller

When inventory is low in terms of housing, that means it is a seller’s market.

Keep An Eye On Real Estate Trends

It’s important to stay up to date with real estate trends, news, and updates in order to know whether or not it is a buyer’s or seller’s market. With this knowledge, you can use it to your advantage to either wait to sell your home, or sell it right away. The same applies if you are looking to purchase a home. Keep this quick guide in mind and you will be sure to understand the basics of the housing market.  Here’s an example of how to monitor supply and demand in a neighborhood (scroll down below picture)

Bio: Jennifer Bell is a freelance writer, blogger, dog-enthusiast and avid beachgoer operating out of Southern New Jersey

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Jennifer Bell
Freelance Writer
(215) 941-5658
jenjenwriting@gmail.com


I want to make sure you’re using at least one of these two utilities; it’s important because they are cutting edge in each of their categories and will help you be a smarter, more informed buyer, seller or owner of real estate. The second one’s importance is not so much the “value” component (let’s be honest, how accurate can a comptuer algorithm really be when nuancing “view”, “condition”, “micro-location” and/or “lot utility” variables), rather the importance in the results of the “big data” tech that informs you how many REAL buyers are actually searching NOW for a home matching your home’s characteristics! No other broker can do this for you and pay PLENTY to bring this service to my clients!

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