Understanding Market Conditions

The real estate market is always changing. It helps to understand how market conditions can affect your position as a seller.

Market Conditions	Characteristics	Implications
Buyers Market The supply of homes on the market exceeds demand.	High inventory of homes. Few buyers compared to availability. Homes on the market longer. Prices tend to drop in this type of market.	Your home may take longer to sell. Less negotiating leverage in terms of selling price.
Sellers Market The number of buyers wanting homes exceeds the supply or number of homes on the market.	Smaller inventory of homes. Many buyers. Homes sell quickly. Prices usually increase.	You may have more negotiating leverage and obtain a higher selling price for your property.
Balanced Market The number of homes on the market is equal to the demand or number of buyers.	Demand equals supply. Homes sell within an acceptable time period. Prices generally stable.	More relaxed atmosphere. Buyers have a reasonable number of homes to choose from.

The Result of Overpricing Many sellers believe that if they price their home high initially, they can lower it later. Often, when a home is priced too high, it experiences little activity. Gradually the price will come down to market value, but by that time it's been for sale too long and some buyers will be wary and reject the property. On occasion, the price is dropped below market value because the seller runs out of time. The property sells for less than it's worth

The Importance of early Activity As soon as a home comes on the market, there is a flurry of activity surrounding it. This is the crucial time when Real Estate Professionals and potential buyers sit up and take notice. If the home is overpriced, it doesn't take long for interested parties to lose interest. By the time the price drops, a majority of buyers are lost.