Sellers’ Real Estate Market

The Real Estate Market is a cyclical business, and it will change over time, so no two markets will be the same. As real estate professionals, we really need to understand what the current market conditions are so that we can advise and serve our clients in the best possible way.

Real estate is arguably one of the oldest and most diverse industries anywhere in the world. It requires efforts to fully understand the diverse areas of a Real Estate Market and its various types. To begin with, lets see the characters involved in the real estate markets and the division of market categories based on the characters involved.

There are 2 main variables involved that determine the flow of the real estate market in a particular direction – Buyers and Sellers. Based on their influence, the real estate market can change its course accordingly.

The market can thus be divided into 3 categories:

Balanced market, Buyers’ market, Sellers’ market

Today, we will look at what is a sellers’ market, and we will dive deeper into what are the different characteristics of a Sellers’ Market.

Seller’s Real Estate Market

A Sellers’ Real Estate Market is when the demand for real estate properties is higher than the supply of properties.

A Sellers’ Market has its own set of characteristics which are given s follows:

Properties of a Sellers’ Real Estate Market

1. Under a Sellers’ Market, the first thing we’ll find that the economy is booming. In this type of economy, everybody is feeling very optimistic, people have jobs, they have money to spend, and overall, the economy is doing well.
2. The supply of properties that are available for sale is less than the demand for properties. So, there are fewer properties for sale than the demand for these properties.
3. Supply is less than demand and therefore, there will be more buyers than there are sellers because the economy is doing well.
4. We also find that buyers will have limited time to make a purchasing decision because the number of properties that are available for sale is less than the number of buyers that are looking to buy properties.
5. Therefore, we get into this multiple bid situation as well, and buyers will not have as much time to make that purchasing decision because the properties will get sold quickly or we may get into this multiple bid situation.
6. Property prices will be rising because there are a lot of people, a lot of buyers competing for the properties that are available for sale.
7. The inventory of properties that are available for sale will be small.
8. Also, we’ll find that during the Sellers’ Market, properties will sell quickly because there are more buyers that are looking for properties.

SAMPLE QUESTIONS FOR SELLER’S MARKET

Example 1:

A recent newspaper headline states, local real estate board says it’s now a sellers’ market. What does this mean?

I. property prices are going up
II. property prices are going down
III. properties take longer to sell
IV. properties sell quickly.

The different options are:

1. statements I and IV
2. statements II and III
3. statements I and III
4. statements II and IV

In this case, we have more than one statement that will be correct for a Sellers’ Market.

The correct answer is A. Statements I and IV are correct. That means property prices will go up during this time as well, the properties sell quickly.

Example 2:

What market is characterized by rising property prices, expansion in the local economy, and three, higher demand and lower supply of properties?

1. Buyers’ market
2. Balanced market
3. Sellers’ market
4. All of the above

The correct answer is B. During sellers’ market, we will see that property prices are going up because there is more competition for buyers, the economy will be expanding, as well as there is a higher demand for properties and lower supply of properties.

These are the sample questions with explanation to thoroughly understand the concept of Seller’s Real Estate Market.

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