Is a Buyer's Market on the Horizon?
Is it a Buyer’s Market? Exploring the Current Real Estate Trends
The real estate market is always a hot topic, with everyone eager to understand the latest trends and shifts. One of the most common questions we hear these days is: Are we currently in a buyer’s market?
In this blog, we’ll dive deep into the data and provide a comprehensive overview of what’s happening in the housing market today. Whether you're a first-time homebuyer, an investor, or simply curious about the current real estate landscape, we’ll break down the factors that define a buyer’s market and what that means for you.
Stay tuned as we explore the key trends shaping today’s housing market, and help you make informed decisions in these evolving times
What is Months of Inventory (MOI) in Real Estate?
In real estate, "months of inventory" (MOI) is a way to measure how long it would take to sell all the homes currently on the market if no new homes were listed. It’s calculated by dividing the number of homes sold in a month by the total number of homes available for sale at the end of that month. This gives us an idea of how quickly homes are selling.
What is a Balanced or Neutral Real Estate Market?
A balanced or neutral real estate market typically occurs when there is a five to seven months' supply of homes available.
In this scenario, neither buyers nor sellers hold a significant advantage.
A six-month supply is often seen as the sweet spot, indicating a perfect balance where demand from buyers matches the supply of homes for sale.
Understanding the months of supply can help you gauge whether the market is tilted in favor of buyers, sellers, or remains balanced.
“Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.
”
“When inventory rises faster than demand, prices have to adjust eventually. Increasing inventory levels are a sign that the market is starting to balance out.”
“The faster housing supply increases, the more affordability improves and the strength of a seller’s market wanes.”
“Sellers and Buyers Need to Be Prepared
As the market moves toward more balance between buyers and sellers, parties on both sides of the transaction need to be prepared to negotiate.
Sellers should expect more prospective buyers to make an offer contingent on a home inspection. Making repairs and improvements to ensure the home is in “ready-to-sell” condition is important. Being prepared to offer assistance for repairs or items discovered during the home inspection will also be important.
For buyers, having all of their financial ducks in a row is critical. Even though mortgage rates are falling generally, the rate and the type of loan someone can qualify for varies across borrowers. By making sure they understand their loan options, buyers will be less likely to stumble on the way to closing.
”
“Whether you are selling your home in a buyer’s market or a seller’s market, you should work closely with your real estate agent to find the best way to market and sell your home.
”
