Buyer’s VS. Seller’s Market in 2015
Brief Reference to conditions of an ever-changing Real Estate Market in Year 2015 – Richmond, VA
The housing marketplace is a pendulum that is constantly moving. The buyer/seller advantage may not be as it appears, and will vary with location, which is not unusual.
Conditions changed several times during the course of 2014; as the market improved, buyers and sellers were anticipating the home sales to favor sellers, but it subtlety changed to favor buyers late in the year. This seems to have happened in spite of generally low inventory in the resale market. Conservative purchasers were taking their time when considering what to buy, and have not turned out in high numbers in order to favor sellers.
Slow to get started in 2015, the general forecast for the overall real estate market is positive for projected sales, although modest in terms of value increases. It is still early in the year, but a noticeable uptick in activity is present in the marketplace. Hang on, things could start moving at a rapid pace very soon – we are on the cusp of the spring market. Improved consumer confidence, pent-up demand, low mortgage interest rates, and new homes coming on the market are a good recipe for activity.
DEFINITION OF ‘BUYER’S MARKET‘
- A situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations. Buyer’s Market is commonly used to describe real estate markets, but it applies to any type of market where there is more product available than there are people who want to buy it.
- The opposite of a buyer’s market is a seller’s: market a situation in which demand exceeds supply and owners have an advantage over buyers in price negotiations.
INVESTOPEDIA EXPLAINS ‘BUYER’S MARKET‘
- During the housing bubble of the early-to-mid 2000s, the real estate market was considered to be a seller’s market. Property was in high demand and was likely to sell even if it was overpriced or not in the best condition. In many cases, homes would receive multiple offers and the price would be bid up above the seller’s initial asking price.
- The subsequent housing market crash created a buyer’s market in which sellers had to work much harder to generate interest in their properties. Buyers expected homes to be in excellent condition or priced at a discount and could often secure a purchase agreement for less than the seller’s asking price for the property.
- In this analysis, a sellers’ market is not necessarily one where home values are rising, but rather one in which homes are on the market for a shorter time, price cuts occur less frequently and homes are sold at prices very close to (or greater than) their last listing price.
- In buyers’ markets, homes for sale stay on the market longer, price cuts occur more frequently and homes are sold for less relative to their listing price.
- “In general, buyers in sellers’ markets this spring can expect tight inventory, increased competition and a greater sense of urgency.
- Sellers in buyers’ markets may need to be prepared to lower their asking price, or to wait longer for the perfect buyer to come along.
- As we put the housing recession further in the rear-view mirror, the broad-based dynamics that applied during those days, when all markets were reacting similarly to nationwide economic conditions, are fading.
- Real estate has always been local, and as the spring market gains momentum, this old adage will only become more pronounced.”
(2015 Blog; Zillow Chief Economist Dr. Stan Humphries.)