Real Estate Marketing Specialists

Explaining the Difference Between A Buyer’s Market or A Seller’s Real Estate Market

Explaining the Difference Between A Buyer’s Market or A Seller’s Real Estate Market

Buyer’s Market or Seller’s Market In Frederick Md? OR Transitioning Market?

In the Frederick real estate market a three-to-six-month supply of homes is normal. Every market is different, so these statistics might not be true for your market. In NW Washington D.C. for instance, four weeks is considered a long time for a home to be on the market.

We call it a buyer’s market when there is a large inventory of homes, more than there are buyers. A buyer then has many more choices and not a lot of competition. A market with more than a 6 month inventory is a buyer’s market. [meaning that it would take six months to sell the inventory, given no more new listings came on the market] Or, in other words, more than an average DOM, Days on Market, of 180 days.

buyers market or sellers market?
A market with an inventory that is below three months, (fewer than 90 days on market) is what we refer to as a seller’s market, with more buyers in the market than homes available. There are usually competing offers on the most desirable homes and we often see some appreciation, depending on other factors.

A balanced market is usually considered when we have 4-6 months inventory. These are generally accepted numbers. [note: In other markets, the numbers would be different, but the “days on market” statistic is the important number to know.]

A Little Market History

In Frederick Md, a “normal” market has an inventory of about 1200 – 1400 homes to be considered a balanced market. For the 2013 year, we saw a very low inventory, around 600 to 800 homes for most of the year. W saw some appreciation during 2013, about 10-11%. In 2014 the inventory grew to about 1000 – 1100 during most of the year and we saw values increase about 2 – 3%, depending on the neighborhood. In 2015, the inventory grew to an average of 1200 and we’re seeing that inventory gradually tick up to a similar number in 2016. As well, we’re seeing a pent-up demand! [to see current inventory statistics, see our latest entry in the market statistics category]

2016 is turning out to be a Balanced Market

frederick real estate

A Market in Transition

Most of the time we’re seeing the market transition. Just when you get used to a market with low inventory and high demand, then very soon the resulting appreciation changes the dynamics, and you see many more sellers listing their homes…then suddenly the see-saw tips and you are in a buyer’s market. It’s worth mentioning that the term “buyer’s market” and “seller’s market” are usually not very useful at best, and misleading at worst.

All Real Estate is Local…Even Micro-Local

Within your own city, wherever you are, there are differences in the various neighborhoods, communities and zip codes. We often see a “buyer’s market” in one community, and a “seller’s market” in a neighborhood only a few miles away. Local businesses and schools, growth and industry…they all have an affect on the local real estate market. All real estate is local.

  • We might see a particular townhouse neighborhood in demand because the local hospital is expanding. The townhouse development on the other side of town languishes.
  • We can see in certain neighborhoods that were constructed during the height of loose lending practices now have a large number of short sales. This affects the prices in that neighborhood negatively, while just a few blocks away, another neighborhood is showing appreciation.
  • Price ranges play a roll in what kind of market we see. In most of our neighborhoods, we are not seeing appreciation in the higher price ranges (above $500,000). We are seeing a longer time on the market and more price reductions to get a home sold.

So, even within the same city, neighborhood trends can create a hyper-local demand that varies from one to the next, for a lot of reasons. Supply and demand still determines the local market.

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Dealing with Multiple Offers

In an appreciating market with low inventory, we naturally see multiple offers on homes that are well-priced and in good condition. How does a buyer navigate a situation with multiple offers?

A few years ago, a buyer had time to consider a home, but didn’t worry about it if they missed out on a house, because more than likely, another home they liked would come on the market soon. Not so today. When the inventory is tight, but the demand is healthy, buyers often don’t have the luxury of time. They may find themselves in a multiple-offer situation.

When a buyer is in a market like this, there are some things to consider:

  • Buyers need to understand that the days of getting a steal are over. Having that expectation will just assure that they miss out on more homes.
  • Buyers should be flexible. Remember that even though you might win the bid with a higher offer, the home still needs to appraise for that amount.
  • Buyers should consider offering their best offer when they are in competition for a home. Having an experienced agent is a big help in planning your strategy.

Keeping a cool head and being flexible are the keys to a successful home purchase when the market is in transition. Is it A Buyer’s Market or A Seller’s Market? It’s most often a market with some aspect in transition.

At the Highland Group, we’ve been maneuvering through buyers and sellers markets, and transitions for over 24 years. We’re here as buyer’s representatives to help you make the best of this transitional Frederick real estate market. Contact Chris Highland for buyer’s representation on your home purchase.

Is it a buyer’s market or a seller’s market? It’s all about supply and demand.


Is it A Buyer's Market or A Seller's Market?
Article Name
Is it A Buyer's Market or A Seller's Market?
Is it A Buyer's Market or A Seller's Market? or a transitional market? What affect does the market have on your selling or buying strategy?
The Highland Group with eXp Realty

2 Responses to Explaining the Difference Between A Buyer’s Market or A Seller’s Real Estate Market

  1. […] While first time home buyers are entering the market, and the first tier of move-up buyers are seeking homes, homes in these categories are in high demand. Buyers should expect the possibility of facing a multiple offer scenario. There is a portion of the market that is seeing a longer time on market for the lack of demand: the price ranges above $500,000. In certain neighborhoods in the smaller, outlying cities in Frederick County, the market is also slow. Read more about a buyer’s or seller’s market. […]

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