Buy Low, Sell High
It doesn’t matter the situation is – that old adage always seems to apply, doesn’t it? You’re going to want the best possible value for your purchase, whether that means a higher sale price for your own home, and a low price on your new home, and the best way to win at both of these is to know – and fully understand – the real estate market.
“A situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations.”
Do you recall the economic downturn and real estate crash in 2008? That entire situation is a perfect example of a buyer’s market: there was an over-abundance of supply as people were trying to sell their homes, and not nearly enough demand. Potential buyers could purchase a home for significantly less than what it had sold for just a few years earlier. There are many factors that contribute to a buyer’s market; everything from home values decreasing, general perception of diminishing property values, and loss of equity, which is generally owing more on a house than it’s worth, or being ‘upside-down’.
In a market with these conditions, buyers have more power, as home prices tend to grow consistently lower over time. As a result, someone looking to buy a new home has the luxury of previewing multiple homes without feeling rushed to make a decision. Sellers have to be more proactive in preparing their homes for sale, spending money on renovations and improvements before listing it for sale. Once a sale has begun, buyers typically can request even more items to be fixed or improved upon, have more freedom to extend due diligence periods, and can request higher closing costs to be paid by the seller.
“A seller’s market is one in which there are more buyers than homes for sale. Since supply is less than demand, homes will be higher priced and more attractive to the sellers in the market.”
Recently, the real estate market has begun to rebound from the economic recession from earlier this decade, and is quickly shifting towards a seller’s market. There’s greater demand for housing as more people trusting the market and are willing to invest in a home. As this demand increases, there will be more people looking to purchase than there are homes available, property values will rise, and the public perception is that they will continue to rise.
Just as a buyer has the upper hand in a buyer’s market, a seller is in a position to win in a seller’s market. Buyers are faced with a steady increase in prices over time, view less homes before buying, and feel greater pressure to make a purchase before a desired property is purchased by someone else. Home listings often last only a day or two, and sometimes just a few hours, before potential buyers begin clamoring over the properties. It’s not unusual for a situation like this to result in a bidding war, as people who desire the home feel the pressure to ‘get it before it’s gone’. Sellers can often leave minor issues with the home unrepaired, can make greater demands on short due-diligence periods, and are less inclined to assist with closing costs.
What’s all this mean for you?
Whether you’re buying or selling, it’s vital that to understand the market, and how it’s going to trend in the future. At Kenny Realty, we are constantly forecasting the future trends of a dynamic market.
Let us show you how Kenny Realty can give you a competitive edge and make a difference, for you.