Why It’s Always A Seller’s Market

This post has been adapted from Joe Manausa’s article Why Real Estate is Always a Seller’s Market

Whether you’re buying or selling, it’s important to know that it’s always a sellers’ market.

If you’ve been staying up to date on the housing market, then you know that more than ever it’s a sellers’ market. There are a slew of homes for sale.

Though realtors and homebuilders both don’t like to admit it, many areas around the country were over-built in and consumer growth is needed at every level in order to fill the excess inventory of homes. You may think that since the supply is far higher than the demand value would be dropping, but the latter statement still holds true. Real estate is always a sellers’ market. Why?

Homes Are Unique

Owning a home is unlike any other thing. Houses are unique as soon as we put our touches on them and our families make them a home. When it’s time to sell, the value of the home will be based upon what other homes similar to them can be purchased for at that time.

Homes Are A Necessity

There’s many trends in today’s world,  and we can’t be sure of what will stick around. One thing we can be be sure of is housing. No one is in a rush to retreat back to living in caves. There will always be someone who needs a home, so there will always be some level of demand for housing.

Home Owners Can Make It A Sellers’ Market

If there is a home for sale worth between $150k and $200k, the homeowner must determine an asking price. Based on the current market conditions where there are a slew of homes for sale, here are some options for the seller.

Asking price $210k- This seller has made many homes on the market appear more attractive than his, so now he’s in the buyers’ market. Many buyers get to choose whether or not they want to look or make an offer on this home because there’s no fear of missing out. The home at its current price is easily replaceable.

Asking price $195k- Buyers still have the edge here as there are hundreds of homes that can replace this home if it sells. Though the home is priced for roughly what it is worth, there’s over a year’s supply of homes on the market so buyers won’t feel compelled to make an offer today.

Asking price $180k- This price places the home at less than it’s truly worth. In this price range, the home is a steal and now the seller has made his own private market a sellers’ market. They has the ability to motivate buyers to act now because they have the best deal around.

Home Buyers Have a Better Understanding Of The Type of Markets For Each Home

Buyers often think that they need to use the same offer strategy for each and every home, as they have many to view. But after the previous example we all know that home buyers don’t want to approach every home from the same angle.

Each viewing will require something different. The first home requires some research to define what the house is really worth. The second requires the buyer to break out their bargaining skills and negotiate a price; but the third home requires responsiveness. If a buyer wants a home, a “full price plus” offer is what it’s going to take to get what they want.

Buyers frequently make the mistake of trying to negotiate with a well-priced seller. The sellers that are doing this correctly have complete control of the home selling process. Sellers who price competitively will use their low offer to get a higher bid from another buyer. You don’t want to make an offer that they can refuse.

If you’re looking to buy a short sale or foreclosure, and you think you can steal it, you may be able to make a low-ball offer. But the level at which you can steal is easy to determine by a real estate professional who knows the market. If you offer below that amount, you could risk not getting the house you want.

Ultimately, if a home seller prices their home too high they will most likely not sell due to the condition of the real estate market. But those who are priced to sell will sell at, or above their asking price. Buyers need to recognize a deal when they see it. They don’t come around very often and if you snooze you lose!


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