Ask a REALTOR® - What Does it Mean if an Area is Experiencing a Seller’s or Buyer’s Market?     

Posted by Mike Brown Group on Monday, June 15th, 2020 at 9:00am.

  

If you’ve looked at any of our recent Treasure Valley housing marketing updates, you’ve probably noticed the term “Seller’s Market” mentioned a time or two. So, what exactly is a seller’s market as it pertains to real estate? A seller’s market is a real estate term that conveys what the housing market is doing in a given area.

For several years, the Treasure Valley has been a seller’s market, which means there’s more demand for housing than there is supply. A seller’s market occurs when there’s generally less than four to five months of housing supply available in a market. Supply is calculated based on the number of properties for sale divided by the number of homes sold. The resulting number indicates the number of months of supply—the smaller the number, the stronger the seller’s market.

A balanced market is when there’s about six months’ worth of inventory available. Once inventory creeps up beyond seven to eight months, then it turns into a buyer’s market.

Since a seller’s market has limited inventory, prices for houses tend to go up, and there’s usually competition for homes, driving the sale price higher, or the seller can negotiate even more favorable terms.

In a buyer’s market, as the name implies, buyers are in the driver’s seat when it comes to negotiating, meaning there’s plenty of available inventory to satisfy demand. Price appreciation tends to slow, and there’s usually not as much demand or competition, so people who are selling their homes will have to be more flexible when it comes to negotiating their home’s sale.

The Treasure Valley, and Idaho in general, have become popular destinations for people relocating from other states. And this trend is expected to continue beyond this year. The bottom line is if you’re interested in selling your house, now is a fantastic time to do so as you’ll most likely receive top dollar for it.

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