As you might have guessed, a buyer’s market favors homebuyers, not sellers. But what, exactly, does that mean?

It signifies that outside factors—such as supply and demand, comparable sales in the area, the state of the economy, public sentiment, confidence in prospects, and alterations in tax legislation—benefit buyers.

These factors create an ideal scenario for buyers in the real estate market.

What does it mean for buyers?

In a buyer’s market, buyers are more likely to get a sweet deal.

If looking to buy a new home, it’s an ideal time to make your move. Why? You could leverage the surplus of available properties to your benefit and acquire your ideal home at a more affordable price.

And because the market is less competitive, you will likely have more time to make a decision and less chance of getting caught up in a bidding war. You may be able to finagle some additional perks, as well.

Plus, buyers in this situation typically control the closing date, she says.

But don’t get too excited. No one’s giving their home away in a buyer’s market. While you may get a deal, you may not get a steal.

It’s still smart to stick to your budget, so you can avoid financial trouble if the markets shift in the future.

What does this mean for sellers?

As you can imagine, a buyer’s market is not a particularly good time for sellers.

With numerous sellers vying for the same pool of buyers, properties can often sit on the market for extended periods, sometimes a year or longer.

It can be advantageous to make sure your home is move-in ready and shows well in photos. If the home isn’t move-in ready, Williams says sellers should be open to offering additional concessions, such as paying closing costs or a carpet or paint allowance.

Additionally, if your home has a unique or distinctive feature—such as an oversized backyard or a hidden room—it's crucial to emphasize that feature to buyers.

Are we in a buyer’s market or a seller’s market right now?

The last several years have been pretty rough for homebuyers. In December 2020, mortgage rates hit an all-time low; this subsequently prompted a buying frenzy and made the market a very competitive place. Buyers found themselves having to bid over the asking price and waive contingencies just to compete with other buyers and make their offer stand out. At that time, real estate agents shared anecdotes of the average house receiving 10 (or more!) offers. These conditions put us squarely in a seller’s market.

Of course, today’s real estate market has slowed down considerably. Mortgage rates are hovering in the mid-6% range, which is affecting home affordability and deterring both buyers and sellers from making moves. That stagnation is also the result of high home prices. In May, the median listing price grew to $441,000, up from $430,000 in April. And experts predict prices will climb even higher in June.

So while we are certainly not in the unprecedented seller’s market of 2021, we also can’t qualify the conditions right now as favorable for buyers.

But there are a few glimmers of hope on the horizon.

“Based on current trends, it’s possible that [home prices] won’t hit the previous year’s peak for the first time in our data,” says Sabrina Speianu, economic data manager at Realtor.com.

Also, homes are lingering on the market for a median of 43 days, which is 14 days longer than last year. And the number of home listings with price reductions rose from 10.2% in May 2022 to 12.7% this year. These two factors indicate that—for the nation’s housing market as a whole—demand for homes is lower than it was at this time a year ago.

Original post courtesy of realtor.com

Rich Dallas/Sharon Fincham

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The Dallas-Fincham Team and Berkshire Hathaway HomeServices

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