Understanding Market Conditions
The real estate market is in constant flux, not only as a whole but in particular areas as well. Knowing what is going on in the overall and local real estate markets will help you understand how these conditions can affect the sale of your home. When you meet with your sales representative, ask about the current state of the market.
The supply of homes on the market exceeds demand. Inventory of homes for sale is high, and fewer buyers compared to availability. Homes are generally on the market longer and prices are either constant or might be dropping. In this market, buyers can spend a lot more time looking for a home but can have more leverage when negotiating a sale price.
The number of potential buyers exceeds the supply of homes on the market. There is a smaller inventory of homes with many competing buyers in the marketplace. Properties sell quickly and prices usually increase. Buying decisions must be made quickly and many times while competing with other buyer’s offers. Because of this conditional offers may be rejected in favour of offers with less or no conditions.
The number of homes on the market is roughly equal to the demand. Reasonable offers are accepted by sellers and homes sell in a reasonable time period. Prices generally remain constant. There is less competition between buyers, as there is a reasonable number of homes to choose from.