By Tamra Haase
A seller’s market arises when demand exceeds supply. In other words, there are many interested buyers, but the real estate inventory is low. Since there are fewer homes available, sellers are at an advantage.
In a seller’s market, homes sell faster, and buyers must compete with each other in order to score a property. These market conditions often make buyers willing to spend more on a home than they would otherwise. Therefore, sellers can raise their asking prices. Furthermore, the increased interest means that buyers rarely have the power to negotiate and are more willing to accept properties as-is.
If there seems to be a shortage of housing, these conditions can lead to bidding wars, buyers will make competing offers and drive up the price, typically above what the seller initially asked for.
Will The Housing Market Be Cooled by Rising Mortgage Rates?
Lack of inventory remains the most significant impediment to home sales, but falling affordability (due to astronomical price increases) is simply driving some first-time buyers out of the market. However, the rate of home price growth has decreased by 2 percentage points since last month.
As inventory continues to dwindle, there is no relief in sight for homebuyers. Before the cooling-off trends begin this fall, the median home price is predicted to reach new highs in the coming months. This year, more homeowners are listing their houses for sale, resulting in a record-high percentage of homes for sale being “new listings.” While the flood of sellers will help alleviate some of the competitive pressure that buyers are under, buyers must still make offers that are strong enough to win out in a multiple bid scenario.
Keep your eyes on the prize this year. Be patient. Low interest rates are still available and that perfect dream home is just a closing away.
