As we approach the end of November, there has been an increase in new home construction and builder confidence, while rates remain low and unemployment claims start to rise.
Summary: Are you thinking of buying or selling soon? If so, do you know what kind of market you’re in, or how to tell the difference between a buyer’s and a seller’s market? This article will help explain.
Whether you’re buying or selling a home, it helps to know what kind of market you are getting into. Ideally, buyers will want to purchase a house when it’s a buyer’s market, which will allow them to have more homes to choose from and more negotiating power when it comes down to wheeling and dealing.
Sellers, on the other hand, want a seller’s market, which will give them the upper hand in terms of what type of price they can command and how quickly they can sell.
The question is, do you know whether you’re in a buyer’s or seller’s market? How can you tell the difference between the two?
When there are more homes available for sale compared to the number of buyers looking for a home, this is considered a “buyer’s market.” In this case, buyers have their pick of the litter when it comes to the number of homes available for sale to choose from. And with a higher supply than demand, home prices tend to be lower.
Listings tend to linger for longer because there aren’t as many buyers out there as there are homes. In this case, buyers are in a favorable position.
The opposite can be said about a seller’s market, which is a scenario whereby the demand is much stronger than supply. In this case, there are fewer houses on the market to meet the demand, which creates more competition among buyers and higher prices for homes.
In this type of market, homes tend to sell very quickly and often end up in bidding war situations. Buyers need to make sure they are pre-approved for a mortgage and have air-tight offers that will allow them to stand out from the crowd. In this case, sellers tend to have the upper hand.
What Type of Market Are We Currently in?
Right now, there are more buyers for homes in the lower price range than there are homes for sale, making it a seller’s market. For higher-priced homes, there are more homes for sale than buyers, which leads to a buyer’s market.
Having said that, both buyers and sellers have been coming out of the woodworks as restrictions ease from the coronavirus pandemic. As such, the real estate market in WA, ID, OR, and CO – as well as across the entire nation – is very strong and is heating up as we speak.
Plus, interest rates on mortgages are as low as they’ve ever been, making home buying more affordable today compared to months earlier. And if you’re in a buyer’s market, you have an extra advantage of better prices on homes, especially in the higher-priced home segment.
But even if you plan to buy a home in the lower-priced segment where competition is stronger among buyers, there are still things you can do to ensure you come out with a successful deal:
- Get pre-approved for a mortgage to know how much you can afford and to be a more competitive buyer
- Put in a strong offer
- Offer a big earnest deposit amount
- Make your offer as clean as possible
- Move quickly on a home without hesitation
- Be flexible with the closing date
- Write the seller a personal letter
And of course, team up with a seasoned real estate agent and mortgage company to help you get a leg up on the process and come out on top. Having experts on your side can mean the difference between a successful and not-so-successful deal.
What you need is a professional working on your behalf to help you navigate the murky waters of the real estate market. Get in touch with Sammamish Mortgage today!
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Sammamish Mortgage is a local lending firm serving the broader Pacific Northwest region including Washington state, Idaho, Colorado, and Oregon. We are proud to offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have any questions or are ready to apply for a home loan.