We are still firmly in a seller’s market—here’s what that means for you.

Since there has been a lot of discussion about the real estate market cooling down from the frenzy that we experienced over the last few months, you may be wondering what that means for you as a buyer or seller. Whatever your plans are, know that the current market is anything but normal. Today I’ll discuss the three kinds of markets and identify which one best describes our current conditions.

A buyer’s market is when there are more homes for sale on the market than there are buyers looking to purchase. This type of market gives stronger negotiating power to buyers simply because it forces sellers to compromise in order to sell their homes. A neutral market, on the other hand, is where the number of available homes and the number of buyers looking is nearly even. In this type of market, there’s enough inventory to meet the level of demand.

A seller’s market occurs when there are more buyers in the market than there are homes available to purchase. Sellers have the upper hand in negotiations in this type of market because the lack of supply motivates buyers to go above and beyond to win homes against their competitors. Over the last couple of years, we’ve been in a red-hot seller’s market. On the graph at 2:13 in the video above, you can see just how far below a neutral market our inventory is today.

“Experts don’t anticipate that we’ll move into a buyer’s market anytime soon.”

What does this mean for you? Ed Pinto, Director of the American Enterprise Institute’s Housing Center, says, “Overall, the best summary is that we’ll move from a gangbuster seller’s market to a modest seller’s market.” Experts don’t anticipate that we’ll move into a buyer’s market anytime soon.

If you’re thinking about buying or selling a home and have any questions about what this market means for you, please give me and my team a call or send an email. We’d love to have a conversation with you.