Expert Contribution

What’s The Difference Between A Buyers’ Market And A Sellers’ Market?

A buyers’ market is when demand for homes decreases and there are more homes (supply) for sale than there are buyers (demand) for those homes. 

Oddly enough in different neighborhoods demand can be less or greater than other neighborhoods within the same city. So, a buyers’ market and sellers’ market can occur at the same time in the same city just with in two different areas. In Danville generally there is more demand for homes closer to the freeway, but not so close you can hear it. Less buyers moving here want to drive all the way down Camino Tassajara when they can shave time off the commute to live in the neighborhoods closer to downtown. 

A sellers’ market is the opposite of a buyers’ market. A sellers’ market is when there are not enough homes for sale as there are buyers shopping for those homes. The demand (buyers) is greater than the supply (homes for sale). A sellers’ market is a great time to sell your home, because you should be able to get top dollar, and in times such as now, get over appraised value. 

How do you know if it’s a Buyer’s or Seller’s Market? 

The market changes just as the seasons do, and it has a lot to do with school timing as well. Families want to get in before school starts and not disturb their kids in school moving and changing schools mid year. So generally, you’ll find summer is when most people buy and sell. There are a lot more homes for sale in the summer months. There are two things you should look at to understand if it’s a sellers’ or buyers’ market. First: look at the inventory, in winter months inventory is down, so it looks like a better selling season, but hold on…. The next thing you look at is demand. How do you know how many buyers are in the market? Excellent question, call a professional such as myself and we will show you! Once you know how many real buyers are searching for a home like yours and you know how many homes there are that fit that need, then you can determine whether it’s a buyers’ market or sellers’ market for you and your home. 

Real estate professionals call it “absorption rate”; we look at how many months of inventory we have based on how many homes are selling monthly. Generally anything less than 2 months of inventory is a sellers’ market. If you want to know more about your home’s value, call me! I can do a free market analysis and let you know what your home will sell for in the current market. 

By Tiffany Stock, Real Estate Broker, Keller Williams