Why is it a Seller's Market?

                                                   http://www.joshuaandshellyre.com/home

        You may have heard over the years, "It's a Seller's Market". But a lot of people are uncertain of what that means. The actual definition is this: A market which has more Buyers than Sellers. High prices result from this excess of demand over supply. This means that when there are more people seeking to buy a home than there is inventory, there may be several buyers who will want to bid on the same property. This, in most cases, will drive up the price of a home's value.

As you may have noticed, in the past several months that the real estate market trends have been shifting. For much of 2015, the market was a bit more balanced, the supply and demand were weighted about the same. Inventory in quite a few areas in Southern California has been declining recently. So again, most real estate analysis' are predicting that 2016 will be a "seller's market."

Generally, here are the characteristics of a sellers' market, according to Reality Times:


1. Booming local economy. Local businesses are hiring at a brisk pace. New companies are opening up shop.

2. Low existing housing inventory. More jobs are coming into a market where there's not enough inventory to house all the workers, thus creating financial pressure on local resale units.

3.  Home sales prices are escalating. Over the last several years, the national increase has been in the five to seven percent range. In a seller's market, it's not unusual to experience double digit increases. Some communities could double in price in just a year or two.

4. Buyer contracts begin to come in non-contingent. Buyers want to purchase a house, period. They no longer offer under list price, ask to sell their house first before settlement, or try to buy without financing already approved. There is no negotiating for the "perfect" terms. Getting the house, is the perfect term.

5. Seller subsidies disappear. While buyers used to ask for some sort of assistance -- lower price, points paid, closing costs -- the buyers must come to the table without any help from the seller.

6. High down payments become the norm. Buyers benefit from high appreciation and begin bringing down payments such as 25-plus percent to the transaction.

Does any of this ring true in your area?


While we are starting to see this trend emerging, it is still not too late for buyers to benefit from buying now. The rates are still at an all time low. The Feds are expected to slowly raise the interest rates over the next year or two, but we are not there yet. Buyers are in a very good position to take advantage of rates that may never be this low again. Another way buyers are still in a good position is the season. Typically we find that most people who are wanting to buy do so more often in the spring and summer. The benefit to a buyer who makes a purchase in the off season, is that even though inventory may be low, your competition with others buyers for the same home will also be extremely minimal. It's time to buy some Real Estate!