What Does It Mean When It’s a Seller’s Market?
Filed under: Real Estate Market
Right now, the housing market is in the seller’s favor, which is why we call it a seller’s market. You will find that you have to fight for a home by entering a bidding war, waiving the inspection or appraisal, or making all-cash offers. Buyers have to do whatever it takes to stand out to the seller. What contributes to a seller’s market, and does this mean that now is still a good time to buy?
What Is a Seller’s Market?
A seller’s market is when the seller is in control. During a seller’s market, buyers have to compete in order to secure the homes they want to buy. Take a look at some of the factors that contribute to a seller’s market:
- Low Inventory: The number of homes on the market cannot keep up with the number of people looking for homes. There is not enough inventory to serve each potential buyer, which leads to competition for each home that is up for sale.
- Low-Interest Rates: The low-interest rates allow buyers to be able to expand their budgets and increase bids on a home they are interested in. For example, if the interest rate is even 1% less than expected, the buyer has more flexibility in their budget. The interest rates spread over a 30-year mortgage can make a massive difference in the buyer’s budget.
Combining these two elements can lead to a significant increase in home prices like we’ve seen in the past year or two. This phenomenon is why sellers are in control right now.
Is Now the Time to Buy?
It is definitely an excellent time to buy if you can get your foot in the door now before interest rates rise. The rising home prices are only good for your investment. And the low-interest rates will allow you some flexibility in your budget when competing with other homebuyers.
Buying a home in Temecula can come with its challenges right now, but you can make it happen with the help of a trusted real estate team. If you want to get your offer accepted in this highly competitive market, reach out by texting, calling, or emailing me at (951) 473-0390 or [email protected].