28 Oct The Bibel Team: Sellers’ Market
Hey everyone, Eric Bibel with the Bibel Team at NEO Home Loans. And today I’m going to talk to you about, what does it mean to be in a sellers’ market?
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So, sellers’ market. What is it? What does it mean? Why is it impacting the market today? I’ve been getting a ton of questions around that. Eric, what is a sellers’ market? What’s a neutral market? What’s a buyers’ market? When will we see a shift? So ultimately, the simplest takeaway is a sellers’ market is when the seller is favored over the buyer. And what that ultimately means is, anything less than six months of available inventory ultimately indicates a sellers’ market. So what does that mean? That’s great. You’ve said this now, a number of times there, what is a sellers’ market? So sellers’ market is again, less than six months available inventory. And how that’s calculated is the number of homes that are currently for sale factored into the time in which homes are selling. So relative to the number of homes purchased. As of today, nationally, we’re looking at a market where your home will sell, if you list your home today, typically in less than two and a half months. Six months sellers’ market, we’re sitting below that. Half below that. Meaning the home that you list today will sell in less than two and a half months.
And if we break that down more specific to areas like San Diego, there’s argument that we’re looking at a market here in San Diego where it’s less than a month where your home will sell. And in some instances less than two weeks. So ultimately what that means, in a sellers’ market, the seller ultimately controls that the ebb and flow. So what the home ultimately sells for, the appreciation that a potential home seller will experience, relative to the time in which they purchased. And what does that mean for a buyer? Well, you’re in a wildly competitive market. meaning there’s the number of people that are wanting to potentially purchase property. There is a huge pool of individuals interested in real estate. And the number of homes that are available for sale is very, very low. Simple supply and demand takes over.
So, call to action here. What all this means is you’re in a sellers’ market. Well, as a buyer, we feel deflated. Oh my gosh, I’m not gonna be able to buy. I’m not gonna be able to get my home sold or be able to get my offer accepted. Well again, great for a seller. And if you’re thinking about selling, this is absolutely an amazing time to be a seller. But on the flip side of that, as a buyer, what does that mean for the buyer? Well, at the end of it, you need to be in a position where you can be competitive. Being competitive means being able to act nimbly, very quickly. If you see a home that you like, chances are there are other people that are seeing the same home that you like. So be in a position where you’re, pre-approved. We’ve talked about this in previous content, being able to act quickly but with confidence. So, having your financing in order, being competitive, willing to shorten the length of time in which you can close, shortening the time around your contingencies, being prepared to over offer over list price. So again, just being incredibly nimble puts you in competition in a sellers’ market.
Back to the sellers’ market, what that means and the different stages within a market. We’re undoubtedly in a sellers’ market. There’s no question about that. We don’t see that changing anytime soon. And why is that again? Incredible demand fueled by low interest rates, new household formations. And on the flip side of that, the supply. There is really no supply factor out there. We’re not seeing the number of homes come on market to help satisfy that demand. So really we expect this to continue forward for really the foreseeable future.
As a buyer, what does that mean for you? Well, as I said earlier, your best position and best play at a sellers’ market is to ensure that you are prepared to go to war. Sounds very overreactive, but that really is what we’re seeing as a potential buyer. Positioning yourself and aligning with trusted professionals to help guide you through that process is more crucial than it ever has been. So really getting your financing up front, positioned well. Having those conversations around what this market is doing, how can I best position my offer to ensure that we’re competing in a sellers’ market is more crucial than it has ever been.
I want to close with this very important part. If you’re a seller, there is an amazing opportunity on the table for you. But if you’re a buyer, that opportunity is equally as amazing, but it comes down to, for both sides of those coins, who you work with matters. We would love the opportunity to work with you. Please give us a call today.