Buyers vs. Sellers Market—What is the Difference?

There are many factors which affect the real estate market–interest rates, employment, investment growth, legislative changes and new construction, to name a few. All of these factors influence the real estate market in some way.

In a buyer’s market, there are more homes for sale than there are buyers. This could be a result of high unemployment, fear of interest rate increases or other factors which make people think twice about purchasing a home for the first time or moving up into a larger home. The advantage buyers have in a buyers’ market is that they can typically take their time and look at all of their options before buying. Overall, home prices may go down in a buyer’s market.

In a seller’s market, there are fewer homes for sale to a larger pool of buyers. The factors at work could be sustained low-interest rates, high employment rate, legislative changes which make it easier to purchase a property–events and conditions that make buyers think it would be a good time to buy a big-ticket item like a home.

The advantage goes to the seller in a seller’s market–typically home prices will rise as buyers are quick to make an offer to secure the property.