Are We in a Buyer’s Market or Seller’s Market Right Now?
The real estate market is constantly shifting between a buyer’s market and a seller’s market, influenced by factors such as housing supply, interest rates, and economic conditions.
These shifts are a natural part of the real estate cycle, a recurring pattern of expansion, peak, contraction, and recovery that affects investor opportunities. Understanding current market conditions and knowing where we are in the real estate cycle is crucial for making informed decisions, whether you’re purchasing a home, selling a property, or investing in real estate.
Right now, buyers and sellers alike are asking: Are we in a buyer’s market or a seller’s market?
Here’s a quick and concise look at the characteristics of buyer’s markets vs. seller’s markets, and how we know which market conditions are dominating the US now.
What is a Buyer’s Market?
A buyer’s market occurs when there are more homes for sale than there are buyers. You’ll typically see:
- More homes available for sale
- Lower home prices
- Homes taking longer to sell
This economic climate gives buyers an advantage in negotiations. In this type of market, sellers may need to lower prices, offer incentives, or be more flexible with terms to attract buyers.
What is a Seller’s Market?
A seller’s market occurs when there are more buyers than available homes. You’ll typically see:
- Fewer homes available for sale
- Rising home prices
- Quicker sales
This gives sellers the upper hand in negotiations. In this type of market, buyers may face bidding wars or need to make competitive offers to secure a property.
Are We in a Buyer’s Market or Seller’s Market Right Now?
As of 2024 year-end, the US as a whole is still in a seller’s market, as evidenced by the following:
- We currently have three months of housing supply, meaning it would take only three months to sell the entire inventory. For reference, a balanced market holds at least five months of supply.
- The median sales price is up 6.1% year-over-year.
However, we’re seeing signs of the market balancing:
- Homes listed for sale have increased by 12.2% year-over-year.
- Home prices are not rising as steeply.
- Homes are starting to take longer to sell.
However, real estate is a local industry, so market conditions can vary from one neighborhood to the next.
Why It’s Important to Invest Regardless of Buyer’s Market vs. Seller’s Market
Real estate investors need to remember that there are deals to be found under any market conditions.
A buyer's market is a great time to expand your real estate portfolio by using lower buyer competition to control negotiations and buy properties at a discount.
Plus, when you have local networks of industry insiders and efficient workflow systems in place, you can reduce costs while increasing return potential whether you’re in a buyer’s market or seller’s market. That’s why it’s always the right time to invest in real estate with Gatsby Investment!