In the ever-changing world of property, the terms ‘buyers’ market’ and ‘sellers’ market’ are phrases bandied about.
These property market conditions can significantly impact your ability to buy or sell a property, regardless of which side of the fence you find yourself on.
As an estate agent, we will provide you with a detailed analysis of the property market to find out if we are in a buyers’ or sellers’ market and offer valuable tips to navigate through them successfully.
Additionally, I will shed light on a lesser-known market condition called a ‘balanced market’. So, let's delve into the nuances of these markets and equip you with the knowledge to make informed decisions on buying and selling.
A ‘buyers’ market’ occurs when the number of homes available for sale exceeds the number of potential buyers. In this scenario, buyers hold the advantage, as they have more choices and can take their time to make decisions. They may even negotiate with sellers to secure more favourable prices. This is an ideal market for buyers as attractive deals are plentiful, while sellers face the challenge of standing out in a sea of properties for sale.
Conversely, a sellers’ market arises when there is a higher demand for homes than available inventory. This creates a power shift in favour of sellers, who can benefit from increased competition among buyers. In a seller's market, properties tend to sell quickly and sellers often receive multiple offers, driving up property prices. This market can be challenging for buyers, as they may face bidding wars and have limited negotiating power.
Apart from the buyers’ and sellers’ markets, a balanced property market exists where the number of people looking to sell property matches the number of potential buyers. In a balanced market, equilibrium is achieved, leading to stable prices and a reasonable timeframe for property sales. This market condition offers a fair playing field for both buyers and sellers, creating a more harmonious real estate environment.
At the core of these property market conditions lies the principle of supply and demand. Home buyers have the upper hand when the supply of homes surpasses the demand. Conversely, when demand outpaces supply, house sellers hold the advantage. Recognising which property market you are in is crucial for making informed decisions, regardless of whether you are a buyer or a seller.
What Kind of Property Market are we in?
The best way anyone can judge the market is to analyse the percentage of properties marked as "Sold STC" (Sold Subject to Contract) and "Under Offer" in relation to the total stock of properties on the market.
E.g. if there are 500 properties on the market (both available and sold stc/under offer) and 200 are sold stc/under offer … 200 as a percentage of 500 is 40%.
Everyone can do this by searching the property portals (e.g. Rightmove, Zoopla and OnTheMarket) by searching for your local area and calculating it by asking for the results with sold stc/under offer and without sold stc/under offer.Read More
Tips for Home Sellers in a Buyers’ Market
If the property market becomes a buyers’ market, home sellers will need to understand the challenging market conditions and set a competitive price from the beginning. Overpricing will deter potential buyers from even viewing and lead to your home being on the market for months. People will start to think there will be something wrong with your home and dismiss it even more.
In a competitive buyers’ market, making your property stand out is vital. Consider staging your home and completing any necessary repairs to make it more appealing to home buyers.
Effective marketing is crucial, particularly in a buyers’ market. Collaborate closely with a reputable local agent with extensive area knowledge and a strong marketing team to ensure maximum visibility for your property. Gone are the days of just putting the property on Rightmove and hoping.
Price is not the only factor in negotiations. Buyers may also be open to discussing terms and conditions like what you are leaving regarding fixtures and fittings, so be flexible and willing to find common ground.
Tips for Buyers in a Seller's Market
Clearly understand your property needs and prioritise them. Be prepared to compromise on certain aspects to increase your chances of finding a suitable property.
Build a positive rapport and relationship with the home sellers on the viewing. This can really work in your favour. First impressions can make a difference.
In a seller's market, hesitation can lead to missed opportunities. If you come across a property that meets your criteria, schedule a viewing promptly and be prepared to make an offer if it resonates with you.
While everyone wants a great deal, offering a reasonable price shows respect to sellers and increases the likelihood of your offer being considered. Silly low offers are often dismissed in competitive markets and can sometimes offend.
Although speed is essential, exercising patience is equally vital. Rushing into a decision can result in regret. The right property will come along, so balancing acting swiftly and making informed choices is critical.