The current state of the housing market may feel incredibly hot or oddly quiet, depending on where you live. In actuality, local markets are beginning to shift in different ways. Buyers are making the decisions in some places. In others, the power remains with the sellers. The story is about two markets.
What’s a Buyer’s Market vs. a Seller’s Market?
There are more houses for sale and fewer buyers in a buyer’s market. As a result, prices typically soften, homes sit longer, and buyers have more negotiating power. Supply and demand is all that is involved.
Conversely, a seller’s market occurs when the number of people wishing to purchase homes exceeds the supply of available homes. Higher prices, more offers, and quicker sales are the results of buyers competing with one another for the house they desire.
Depending on where you are, both of these situations are currently occurring. So, how can you determine the type of market you are in? Rely on a real estate agent in your area. They will use these major drivers to explain what is actually occurring in your area.
The Number of Buyers and Sellers by Region
The quantity of active buyers and sellers is one of the main variables influencing each market. This is how that appears by region, per Redfin (see graph below):
The Midwest and Northeast are more likely to be seller’s markets these days. There are still more buyers than sellers, which keeps the balance in favor of homeowners. In general, those areas are seeing higher prices and faster home sales.
However, buyer’s markets are becoming more prevalent in the South and West. There is less competition among buyers and more listings to choose from because there are more sellers than buyers.
Compared to a few years ago, when sellers had the upper hand practically everywhere, that represents a significant change. Local conditions are more important now than they were in the past, and they can differ even between neighborhoods.
Price Trends Mirror the Buyer/Seller Divide
Prices change in tandem with changes in buyer activity and inventory. Prices are still rising in areas like much of the Northeast and Midwest where demand still exceeds supply.
However, prices are easing in regions of the South and West where demand has cooled and inventory is rising. And that’s advantageous for purchasers who want to haggle in those areas.
The following graph, which displays the most recent price data from ResiClub, illustrates how this gap is spreading throughout the nation’s major cities:
It is the story of two markets for this reason. About half of the top 50 metro areas are rising, while the other half are either flat or declining.
However, if you own a home in a market where prices are declining, don’t freak out. Over the past few years, the majority of homeowners have accrued substantial equity, and it’s likely that you have as well. Therefore, you’re probably still going to make a lot of money when you sell.
Why Local Insights Matter
There will be cities, towns, and even neighborhoods that deviate from the regional trends, even in areas that are currently more buyer-friendly. Because of this, an agent’s knowledge of the local market is crucial. They can assist you in comprehending events down to the zip code level, including:
- Whether buyers or sellers are favored in your area
- How to create an offer strategy or determine the appropriate price based on regional trends
- The most effective strategy to execute your move regardless of market conditions
Bottom Line
Understanding every facet of your local area is the first step to success in a market where conditions differ so greatly from place to place. Make contact with a local agent so that, no matter where you are, you have a knowledgeable person at your side who can help you navigate your market.