Before you begin the process of buying or selling a home, it’s very helpful to have a good understanding of the current state of the housing market.
Having this knowledge in your back pocket will help you make informed decisions when it comes to buying or selling real estate in your area.
While the housing market in general is highly localized– something that’s true for Seattle is not necessarily true for Little Rock, for example– there are overall trends that potential homebuyers and sellers should be aware of.
How do I tell what the state of the housing market is?
There are a few helpful sources of information that can help you get a clear picture of the current state of the housing market.
Conducting some internet research will provide you with the information you need. For example, search the current median home value in your area– it’ll give you a decent ballpark of what you might expect to pay.
Checking out listings in your area helps, too. The median home value is more descriptive than the average home value, but the value will differ depending on specific area, home size, amenities, and other factors.
You can also look into current interest rates, including the federal funds rate. If the federal funds rate is higher, it means that you can expect higher interest rates on any loans you take out for a home.
An increased federal funds rate indicates higher interest rates, but it also means that demand can decrease– and since demand has been pretty high for the past several years, that’s potentially a good thing for people who are motivated to find a home.
Understanding general global events can help you understand the market, too. Although it might not seem directly correlated, things like supply chain issues or war can potentially have a major effect on the market.
What is a seller’s market?
The housing market can be described as a seller’s market when demand outweighs supply.
In other words, there are more people looking to buy houses than there are people who are looking to sell houses.
The increase in demand means that sellers have “the power”– they most likely have a good number of potential homebuyers, which means that they can financially benefit from the state of the market.
Many larger cities in the United States are particularly affected by the current seller’s market because people are motivated to move there, often willing to pay large amounts in cash to ensure that they get the home they’re interested in.
What is a buyer’s market?
On the flip side, a buyer’s market is when there are more homes for sale than there are people looking to buy homes.
This means that potential homebuyers have a wealth of options to choose from, and sellers might be forced to accept less money than they’d originally planned in order to make a sale.
In a buyer’s market, buyers have the upper hand; in a seller’s market, sellers have the upper hand. Understanding the current state of the market when you’re looking to buy or sell a home is key in making the best possible financial decision for you and your family.
How can I buy or sell my home in an unfavorable market?
Even if the market is currently not in your favor, all hope is not lost. A qualified real estate agent can give you the tools you need to get the right outcome– it sometimes just takes some industry knowledge and connections to make it happen.
To connect with an amazing real estate agent today, send us a message– we’d love to work with you!