Is It Still a Buyers' Market?
October 25, 2012
Is it still a buyers' market? Has it become a sellers' market? The interesting answer to both of these questions is "It depends".
It is still a buyers' market in as much as prices are still about 30-40% lower than they were in 2005 and 2006. Interest rates (as you can check on my post of a few days ago.) are at all time lows. These two factors make it a really great opportunity for prospective home purchasers to enter the real estate market under favorable circumstances. However, not all is in a buyer's favor. The number of properties being offered for purchase is in very short supply. As a result, buyers find themselves competing for the same property. This competition makes for wrestling with the decision to offer above the listed price and guessing how much above on will have to offer in order to be a successful buyer.
This competition suggests that sellers are now experiencing a sellers' market. The sellers are able to obtain a higher price than expected. However, many of these properties being offered for sale are "short sales" meaning the seller is receiving no proceeds since the proceeds realized from the sale will go to the lender. One of the reasons that there is so much competitive bidding is that often properties are listed below what the real market value is. The reason for this is to make the property sell more quickly and to generate the competition. It may become a sellers' market if the non-short sale seller can also participate in multiple offers and experience the benefits of increased activity and selling prices.
It is a very crazy real estate market for buyers, sellers and agents. At the moment the question of rising prices seems a bit in the hands of the appraisers who must decide market value.
Is it still a buyers' market? Has it become a sellers' market? The interesting answer to both of these questions is "It depends".
It is still a buyers' market in as much as prices are still about 30-40% lower than they were in 2005 and 2006. Interest rates (as you can check on my post of a few days ago.) are at all time lows. These two factors make it a really great opportunity for prospective home purchasers to enter the real estate market under favorable circumstances. However, not all is in a buyer's favor. The number of properties being offered for purchase is in very short supply. As a result, buyers find themselves competing for the same property. This competition makes for wrestling with the decision to offer above the listed price and guessing how much above on will have to offer in order to be a successful buyer.
This competition suggests that sellers are now experiencing a sellers' market. The sellers are able to obtain a higher price than expected. However, many of these properties being offered for sale are "short sales" meaning the seller is receiving no proceeds since the proceeds realized from the sale will go to the lender. One of the reasons that there is so much competitive bidding is that often properties are listed below what the real market value is. The reason for this is to make the property sell more quickly and to generate the competition. It may become a sellers' market if the non-short sale seller can also participate in multiple offers and experience the benefits of increased activity and selling prices.
It is a very crazy real estate market for buyers, sellers and agents. At the moment the question of rising prices seems a bit in the hands of the appraisers who must decide market value.
posted by shirley harry at 8:52 AM
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