What is a Real Estate Sellers' Market?

You've probably heard the terms sellers' and buyers' markets, but you may wonder 1) what the difference is, 2) which type of market we are currently in, and 3) what that means for you as a homeowner. We're here to help answer all of your real estate questions.

What's the Difference Between a Sellers' and a Buyers' Market?

A sellers' market occurs when there is a higher demand for homes than there are homes available – demand exceeds supply. A buyers' market occurs when fewer people are looking to purchase a home and a higher inventory of homes is available for sale – supply exceeds demand.

Factors that affect the type of housing market include the following:

• The time of year – typically, more homes are available for sale in the summer than in the winter
• Investment growth in the area – An area with a growing population, higher employment, etc., may increase demand for homes
• Interest rates – Lower interest rates generally result in more buyers
• The economy – Typically, if the economy is sluggish, so is the real estate market
• Legislation – Tax credits, deductions, and subsidies can increase demand for real estate

Are We Currently in a Buyers' or Sellers' Market?

We have been in a sellers' market for a few years; however, that may be shifting. In the past few years, we experienced record-low interest rates, significant home price increases, and low inventory. However, rising mortgage rates, higher monthly payments, and a loss of buying power may be causing a slight shift.  

According to the Pennsylvania Association of Realtors May 2023 report,  there were 36,146 homes listed in PA in May, slightly up from the previous month but 23.4% down year over year. There were 10,967 sales in PA, which again was slightly up from the previous month but 17.4% down year over year. The good news is that the median sales price in May was $219,811, up 4.2% year over year.

While no one has a crystal ball to see into the future housing market, one expert predicts the following:

• Mortgage interest rates will continue to rise in 2023
• Home prices will witness an increase (but not as high as in 2022) in a market that is "family-friendly."
• Housing inventory will become weaker across the country

The bottom line: We are still in a sellers' market, and with the continued high demand and low home inventory, experts expect us to remain in a sellers' market for a little while.

What Does That Mean for Me as a Homeowner?

Typically, a sellers' market is an excellent time to sell your home because you – as the seller - are at an advantage:

• There are few homes available for sale for buyers to choose from
• Homes sell more quickly
• Buyers need to make quick decisions or risk losing a home to another buyer
• Sellers receive multiple competing offers
• Sellers don't need to make as many concessions
• Homes sell for more money, often over the asking price

Typically, a buyers' market is a better time to buy a home because the buyer is at an advantage:

• There is a high inventory of homes for sale
• Homes sell for less than the original listing price
• Sellers offer buyers incentives, such as paying for closing costs or credit for new appliances
• Homes are on the market longer

Are You Ready to Take Advantage of the Current Sellers' Market?

Pete Heim, a lifelong Berks County resident, knows Berks County real estate like nobody else!  Pete and his team can help sell your home faster and for a better price. Contact Pete today at 610-745-3378 or 610-898-1441 or connect with him online.