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How to know when it is a seller’s market?

“Is it a seller’s or buyer’s market right now???” This has GOT to be one of the most common questions I get from clients. And one of the most important question to ask because it identifies your competition, and how you will need to negotiate. That’s why I am going to give you three tips you need to consider when trying to distinguish who has leverage in your market.

Tip #1. Is inventory low or high?

A healthy, balanced market would have a six-month supply of homes on the market. When the pendulum swings towards 3 months or less of inventory, you are typically in a seller’s market. When you have more than six months inventory, you would be in a buyer’s market.

Tip #2. Are people coming or going?

Just because you have a three-month supply of homes of the market in your area, doesn’t guarantee you are in seller’s market. You could live in a town where more people are moving out of the area, than there are moving in. If this is the case, the demand would be lower and would not constitute the title of a seller’s market.

Tip #2. New construction in your area?

Even if you live in a growing city and there is only a three-month supply of homes, it still may be a buyer’s market. This can happen if there is a large amount of new homes being built in your area. Besides being new, the builders usually offer special financing through their preferred lender, along with closing incentives or closing cost contributions. This could dramatically affect the leverage you may have as a seller. With these three tips, you can get an idea as to what side of the market you are on right now, and then get professional guidance on how to position yourself and create leverage.


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