What is a Seller’s Market?

Selling a home in California can sometimes be a tricky ordeal, especially when market trends are unpredictable.

Before making your first move, you should consult with a professional real estate agent and find out whether it is a buyer’s market or a seller’s market.

Ideally, you want to sell during a seller’s market, as you can reap as many advantages as possible from the sale of your home.

When the time and price is right, you can have major success throughout the home selling process.

Real Estate Definitions

A seller’s market is a real estate term that simply means the market currently has more buyers than sellers. If you’re selling a home in California, then this is good news for you.

This means you won’t have as much competition with other sellers as you would if the buyers were scarce; and it also means that the demand for homes is so high that you won’t likely have as much negotiating your price down to something you’re not comfortable with.

Since there are more buyers than sellers in the market, you will probably have multiple parties interested in your home. This could result in a bidding war. Let’s talk more about what to expect when you sell your home in a seller’s market.

Multiple Offers

Since the market is saturated with so many buyers and fewer homes on the market, there will be many of them battling for ownership of your property. You may end up with an exciting bidding war on your hands!

Mathematically, during a seller’s market, there aren’t enough attractive homes for serious buyers out there, so they must compete with each other over the homes that are available on the market.

And that includes yours.

Buyers will start to increase their bids on your home in order to come out victorious. This means you may not have to worry about price negotiations.

A seller’s market is the absolute best time for you to sell your home because you have more options to get the best deal for you.

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What is a Renter’s Market?

During a seller’s market, you may also come across the term “renter’s market”. Seller’s markets and renter’s markets go hand in hand, since buyers are often forced to rent homes until the market levels off a bit more, and homes become more affordable again.

If you are in the business of renting, this is also a wonderful time to make some investments. More people are looking to rent homes during this time, since they cannot always find a house that meets their price point (as they are often outbid by other buyers).

This kind of market is all about competition, but as a seller, you could choose to hold on to that property and earn rental income instead.

How Can You Tell if the Market is a Seller’s Market?

The market fluctuates often.

Sometimes, there are many homes available to buyers, and other times there aren’t many at all. And vice versa: there are times where there are many houses for sale, but not a lot of buyers, making it easier for buyers to pick and choose their homes.

But there are real terms that can define a seller’s market, and it’s important to watch the market for the signs that it is currently working in favor of the sellers.

A seller’s market can be determined when:

  • There is a shortage of properties, but a healthy buyer demand
  • The demand for houses exceeds their available supply
  • The demand is supported by low interest rates, strong earnings, and overall positive economic changes

Although “seller’s market” is purely a real estate term, it can be used to describe market environments with other forms of business as well.

For example, a company may find that certain assets are scarce, so they are willing to pay more for them, especially if they already have a dominant market share with that asset.

If the company then decides to sell itself, there would be a bidding war because those scarce assets hold an abnormally large value.

Related: What You Must Disclose When Selling a House

Example of a Seller’s Market

Let’s put this definition into practical terms. Let’s say for example, you and your spouse are considering selling your house. You’ve taken a look at the surrounding market, including some of the other homes for sale in your neighborhood, and you notice that the prices have gone up.

Homes that used to go for a selling price of $350,000 could now be selling for $400,000 and up.

You decide to use this to your advantage after your real estate agent confirms the market to be a seller’s market. Maybe something is happening in your area to cause this increase in house prices.

Perhaps a large company is moving to your city and it foresees the creation of 1,000 new jobs. People are flocking into the area and looking to buy homes near this new company.

This would be a great time for you to sell your home. The influx of buyers will create a bidding war on your home, and you will likely sell it for higher than its appraised value.

Sell Your Home During Your Next Seller’s Market

Before selling a home in California, consult with a professional to see whether your local housing market is working in favor of sellers or buyers.

You want to try and sell in the best possible time so you can make the most possible money – with the least possible contingencies to boot.

You can contact your local real estate agent to learn more about the selling process, and to help you determine when the next seller’s market is going to be.

Real Estate Market Report – This Month 2020

📞 Have Questions? Ask The Chris Eckert Real Estate Team

Give The Chris Eckert Real Estate Team a call today at 650.627.3799 to learn more about local areas, discuss selling a house, or tour available homes for sale.

What is a Seller’s Market?
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What is a Seller’s Market?
Selling a home in California can sometimes be a tricky ordeal, especially when market trends are unpredictable. Before making your first move, you should consult with a professional real estate agent and find out whether it is a buyer’s market or a seller’s market.
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