UNDERSTANDING THE MARKET

Market Conditions

Real estate is an ever-changing market. As a seller, you should understand how certain market conditions can affect your position. An understanding of these conditions is a crucial consideration in the proper marketing of your property.

THE BUYER’S MARKET

In this market, supply exceeds demand. There is a high inventory of property and few buyers. Prices tend to drop due to the competing product. A buyer in can exert more control over the negotiation proccess

THE SELLER’S MARKET

In this market, demand exceeds supply. A smaller inventory of homes means many buyers are competing for property. Prices rise in a seller’s market, and property sells quickly. As a buyer, you’ll have less control over price during negotiations.

WHAT IS MARKET VALUE?

The Balanced Market

In this market, supply and demand are balanced. The inventory available is equal to the demand of buyers. Prices are typically stable. Property sells within an acceptable period of time.

The market value of a property is the highest price that the current market will bear. A home’s value will often be related to its cost (either the purchase price or the cost to build a similar new home, less depreciation). However, depending on present market conditions and the demand for the property, its market value can differ significantly from its cost.