As a realtor, I often get asked whether it is a buyer’s or seller’s market. Let’s go through some important factors, that might be helpful in every step of your journey of buying or selling real estate.
Over the last few years, it has been a wild ride in the real estate market. Especially, if you were looking to purchase a home. Real estate market is shaped by numerous conditions, including mortgage rates, economy, supply and demand, geographic area and even unpredictable factors, such as global pandemics. So, there is no particular, specific and always correct answer for the question whether it is a sellers or buyers market, until you weight all factors.
First, it is important to understand the differences between both market conditions.
A buyer’s market, is when the supply of homes outweighs the demand for them, leaving buyers with some space to negotiate and get a better deal.
In a seller’s market is the opposite. The demand is high and exceeds the supply, homes tend to sell very quickly at a relatively high prices, leaving buyers in bidding wars.
There is no doubt, that last couple years we were in a seller’s market. Home sales and prices skyrocketed due to housing shortage and historically low interest rates. While recently, we can all see that the market is shifting. Most important factor, that led the market in this position was significant increase in mortgage rates. Increasing number of homes available to purchase and less competition, bringing prices toward normal levels, leaving the opportunity for buyers to get a better deals.
It is always good to make your own due diligence and evaluate all market conditions before big decisions. But at its core, real estate is a local game. It mostly depends on the unique supply and demand factors of any given area.
For example, in Illinois as a whole, average home price for the last 12 months was $238 600, while a nice and welcoming, historic neighborhood of La Grange, sold home prices were averaging $662,490. In Brookfield, which is also a great neighboring town to La Grange, it was an average of $343 584. This just perfectly illustrates, that even if at a glance, you think that market has pretty much the same economic and global conditions everywhere, it still can not affect pricing in the same way, because of the area where the real estate is located and uniqueness of it.
If you would like to get an accurate estimate of the price for your home or more in depth advice about current market conditions, we are here to help!