In real estate, we use the terms Seller’s Market and Buyer’s Market, but what does that mean and how does it affect homeowners?
1. Seller’s Market:
- Definition: A seller’s market occurs when there are more buyers looking to purchase homes than there are homes available for sale.
- Characteristics:
- Limited inventory of homes for sale.
- Prices tend to rise due to high demand and competition among buyers.
- Sellers may receive multiple offers and have more negotiating power.
- Homes often sell quickly, sometimes above the asking price.
1. Buyer’s Market:
- Definition: A buyer’s market happens when there are more homes for sale than there are buyers actively looking to purchase.
- Characteristics:
- High inventory levels give buyers more options to choose from.
- Prices may stabilize or even decrease as sellers compete for buyers.
- Buyers have more negotiating power, and sellers may need to accept lower offers.
- Homes typically stay on the market longer before selling.
Understanding whether you are in a seller’s market or a buyer’s market is crucial for both buyers and sellers because it influences pricing strategies, negotiation tactics, and overall market dynamics.
The industry rule of thumb is that 6 months of inventory tilts the scales from a seller’s market to a buyer’s market. This means that if there are 6 months’ worth of homes available for sale, the market is balanced. More than 6 months of inventory indicates a buyer’s market, while less than 6 months indicates a seller’s market.
In the below snapshot you can see the current market conditions in Rockwall County and its five major cities:
As of July 5, 2024
* The Numbers reflect all of Royse City, not just Rockwall Count
- Heath: With 7 months of inventory, indicating a buyer’s market.
- McLendon-Chisholm: has 8 months of inventory, also indicating a buyer’s market.
The other cities in Rockwall County have less than 6 months of inventory, signifying a seller’s market.
If You Are Looking to Sell:
1. In a Seller’s Market: You have the advantage. Homes tend to sell quickly, often above the asking price. However, it’s still important to price your property competitively and highlight unique features that differentiate it from others, such as a pool, outdoor living space, or modern upgrades.
2. In a Buyer’s Market: You need to be more strategic. Pricing your property aggressively and emphasizing unique features becomes crucial. The competition is higher, and buyers have more choices, so ensuring your home stands out is key.
If You Are Looking to Buy:
1. In a Seller’s Market: Be prepared for competition. Homes sell quickly, and you might need to act fast and potentially offer above the list price.
2. In a Buyer’s Market: You have more negotiating power. In most cases, you can make offers below the list price with an expectation to negotiate. You have more choices and can take your time to find the best deal.
One last and very important comment. Always remember that market conditions can vary not only by city but also by subdivision. One might be in high demand and selling above market value, while another nearby might be less desirable with lower prices. A good REALTOR® will help you understand your specific area and market conditions, whether you are buying or selling.
Jerry Welch, Realtor
Jerry Welch is a full-time, professional REALTOR® with over 17 years in real estate and specializes in helping seniors transition. He holds an SRES (Senior Real Estate Specialist) designation, which reflects his extensive education on topics such as tax laws, probate, estate planning, and equity conversion strategies. He offers relevant information on current market trends as well as being a valuable resource regarding real estate transactions. He was one of the founding members and is a past chair of the Rockwall Chamber SSA (Senior Services Alliance) Program. (972) 800 3915
