When you don’t live in the real estate world, you aren’t always familiar with real estate terms. A common question I get from people… What is a buyer’s market, and what is a seller’s market?
There are so many things that can affect real estate: who the President is, what big-box companies are doing (ie, growing or closing), which direction interest rates are flowing, natural disasters. As we all know, every little thing causes a ripple effect. The important thing is for you to be ready for each one that comes along.
When you are ready to buy a house, you want to do it during a buyer’s market. With that said, we can’t ALWAYS pick and choose when we buy or sell. Sometimes life happens, and we are forced to move quickly. Other times, we do have the option. We can stay where we are, or we can move. This is when you want to jump into the real estate game. If you sell in a seller’s market, you are guaranteed to make more money. If you buy in a buyer’s market, you are guaranteed to get a better deal. I don’t know about you, but I am ALWAYS up for a good deal. We all work hard for our money, when a real estate opportunity pops up, that requires minimal effort, who the heck can say no to that?
During a buyer’s market, the home prices are going to be down, and the demand is going to be down. If a large box company shuts its doors, this can often send the area into a buyers market. Why? People need jobs, so they will follow the jobs. If a large Toyota manufacturing company, that employs 5k people shuts down to move to Salem, Oregon, where do you think all of those 5k people are going to go? Let’s assume the company pays to relocate 500 of them…now let’s imagine another 500 decide to follow the company. This leaves 4k people without jobs. Maybe 2k of them find another job. Even if we say 500 of them are forced to move elsewhere for work, that is 500 homes that have now been emptied in a quick amount of time (and 500 is on the shallow end). Guess what? You have yourself a buyers market! There are a ton of houses available and absolutely no demand. Sellers will be forced to drop the prices on their homes, which means buyers get a fantastic deal.
During a seller’s market, the home prices will be up, and demand will be up. Now we are in Salem, Oregon, where that Toyota dealership has moved in. BAM, you have a seller’s market. The people in Salem get word that this dealership is going in down the street…what do they do? If they are smart, they will decide NOW is the time to sell. If they were considering selling, they need to jump on this opportunity and sell NOW.
This is a straightforward example of an event that can affect the market. There are SO many more examples we can discuss.
Give me a call and let me tell you when to take advantage of the market.
Call me! 469-585-7591
Your Top DFW Realtor - Brenda Debus