Buyer’s Market or Seller’s Market? That is the question…

June 24, 2020


Any REALTOR would probably agree that the question they get most is, “Is it a Buyer’s market or a Seller’s market?”

The real answer to that question is, “IT DEPENDS…”, 

But first let’s start by defining what each is.  For the sake of simplicity, it’s a matter of supply and demand.  

In a seller’s market, there is more demand (buyers) than supply (sellers/inventory).  This gives sellers the upper hand.  

In a buyer’s market, there is more supply (sellers/inventory) than demand (buyers).  This gives the buyers the upper hand.  

So what contributes to a market going either direction?  Interest rates, jobs, population, schools, just to name a few.  This can vary so much, not only from state to state, county to county, but can vary city to city even.  Dallas could be different from its neighboring City of Fort Worth.  Sometimes it can even vary neighborhood to neighborhood within the same city.  

Another part of the conversation, or a question that is often asked is, “are housing prices/market values still going up or are they (prices/values) decreasing?”

My response is that it seems to be stabilizing.  We went through several years where (in my area) housing prices were increasing an average of 7-8% year over year.  That’s huge y’all.  What’s happening when the prices/values go up?  So do the taxes!  

What is a big contributing factor to those increases??  The sellers market, more demand and less supply!  It was like a feeding frenzy for several years.  Buyers competing with other buyers, going in guns blazing with their offers to sellers, offering more to get an offer accepted, offering to pay appraisal shortages and in some cases, even offering to pay some of the sellers closing costs. 

Does this mean that you can’t get a good “deal” in a sellers market?  Absolutely not.  It is important to know however, that in a seller’s market, cash is not always king.  INVESTORS, I’M TALKING TO YOU…

Everyone wants a good deal, but it’s not wise to assume that because you’re paying cash that you can obtain a property for less than market value. It’s important to remember that if a property is listed at or below market value, then that seller could likely receive multiple offers. Buyers knowing that they are competing with other buyers might offer more for the property because they can afford to do so, because they will have less cash out of pocket to get into a home, although they will pay more over the amortization of their loan over time.  

To a seller who is receiving more than one offer on their listing, they will be looking at their bottom line in most cases.  It’s important to remember that for most people, their wealth is the equity of their home.  Many will not want to give that up!  

More can definitely be said in regards to this, but it will have to wait for a later post!  

Musical Pairing: “Little Boxes” ~ Malvina Reynolds