In a Buyer's Market there is typically a large inventory or selection of homes to purchase. While this is the primary factor there are other elements that influence market type, such as interest rate, employment rate and/or political climate to name a few. When looking at inventory, we are looking at the number of homes on the market compared to the number of buyers actively looking to purchase. When the ratio of buyers to homes is less than 45% it is considered a Buyer's market. In layman's terms: When there are more homes available than active Buyer's it is considered a Buyer's market. Home prices remain stable or sometime decline in a Buyer's market.
In a Seller's market you have less available inventory than those wanting to buy a home. We are currently in a Seller's market as the inventory remains low partly due to many builders pulling out of the business during the thankfully now ended recession. Another factor that exist in a Seller's Market is home prices tend to rise since the demand to purchase and is higher than available homes to purchase. Again, inventory is a primary factor but there are others such as interest rate, area conditions, area growth plan and amenities.
We also need to look at the cost to borrow money. Fortunately, for anyone planning to buy a home today the rates are lower than they have ever been in this country. Hopefully this brief explanation helps clarify some of the conditions that affect the real estate market. However, I think the important point to notice is that we are in an active market with great interest rates. If you are considering home ownership, now is the time. Contact us for assistance at www.khassoc.com.