Currently in the Metro Atlanta real estate market, we are experiencing a seller’s market. Right now there are more buyers looking for houses than there are properties on the market.
If you have been looking to purchase or sell real estate, you may have heard the terms sellers market and buyers market. You may also have wondered what these terms mean and how each market impacts you as a buyer or seller in Metro Atlanta.
What are the different markets?
When there are more buyers than homes for sale, a sellers market is in effect. As you might expect, the conditions in this market favor sellers over buyers. During a sellers market, you will generally find that home prices rise higher than they normally would and that homes tend to sell more quickly.
At other times buyers have more negotiating power. In a buyers market there is a surplus in housing inventory. In other words, there are more homes on the market than there are willing buyers. During this period, prices tend to rise more slowly and may even fall. Also, homes typically take longer to sell.
When conditions do not necessarily favor either buyers or sellers, we have a balanced market. This period occurs between moves toward either a buyers or sellers market. When the market changes, it doesn’t do so overnight. There is a transitional period in between when housing demand and supply are approximately equal and pricing typically stabilizes.
How are buyers and sellers affected?
Buying a home in a sellers market is a very fast and competitive process. Multiple offers on the same property are not uncommon. Some of these offers may even be above the asking price. To improve your negotiating position as a buyer, have your finances in order, get pre-approved for a mortgage, be prepared to act quickly, and make a strong offer. Even so, don’t be surprised and try not to be frustrated if you still get squeezed out of the market by escalating prices and bidding wars.
If your home is for sale when conditions have created a sellers market, your timing is ideal for reaping the rewards of price appreciation. Generally speaking, you also have more leverage in the negotiating process. Remember however, that regardless of your more favorable position in this market, you would be wise to set realistic expectations and remain flexible in negotiations. It is unreasonable to think that a sellers market automatically means you will get full price, agreement on all terms, sale within a few days, or sale regardless of property condition. Hold your ground beyond a reasonable point and you could be left with your home still for sale when the market swings in the other direction.
If you are selling when a buyers market is in effect, be prepared for a challenge. Buyers tend to be more demanding with higher expectations for seller incentives and concessions. If you need to sell, you must be ready and willing to consider sensible compromises with respect to both price and terms. More aggressive marketing may be needed to attract buyers and extra attention to getting your property in the best possible condition will help improve your competitive edge in the marketplace.
Purchasing a home in a buyers market presents you with a great opportunity to find the right home at the right price. Along with this opportunity though comes a different set of potential challenges. With a greater number of homes on the market and bargaining power in your hands, you are faced with numerous choices and the temptation to negotiate on just about everything. To make the process easier, focus and narrow your search based on needs, wants and affordability. And when you find the right home, focus on which concessions are really critical to helping you meet goals and needs.
Even for us experts, forecasting the duration and timing of changes is difficult at best. What is certain, however, is that sooner or later the housing market will change. Neither buyers nor sellers have the upper hand all the time. For you as a buyer or seller, knowing that market change is inevitable as well as which market your area is currently experiencing will give you an informed advantage as you make decisions about buying and selling real estate. For more information on the current Atlanta real estate market, reach out to Catalyst Home Team today!
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