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Real Estate

Understanding a “Seller’s Market”

By Jennifer Gerson

For much of the last decade, the real estate market has been … well, not really in the greatest shape. Home sellers have had to do everything short of staging a three-ring circus in the front yard to attract buyers and throwing in their firstborn child to seal the deal.

Over the course of the past few years, though, there’s been quite the turnaround — to the point where now, not only are we in a seller’s market; we can’t keep houses on the market!

So, what exactly does “seller’s market” mean?

A seller’s market occurs when the demand for homes outpaces the available supply. One handy way to determine exactly when the market enters the “seller’s phase” is when the ratio of sales to listings hits 55% to 60%, or three sales for five listings. The opposite of a seller’s market is, of course, a buyer’s market, which is characterized by a ratio of fewer than seven sales per every 20 listings (below 35%).

What factors cause a seller’s market?

One major factor in spurring the current seller’s market is the drop in interest rates, which allows more people to qualify to buy homes or to afford more expensive homes. Population growth, migration from the North and increased employment opportunities in Miami also bring more buyers into the market.

What are some signs of a seller’s market?

In a seller’s market, homes don’t stay listed for too long. Many homes sell in just weeks, while others take days or even hours. Many sellers even find themselves with the enviable problem of mediating a “bidder’s war,” with multiple offers coming in. Not surprisingly, some of these homes even sell for well over the listing price, as desperate buyers offer top dollar.

How does a seller take advantage of this market?

The best way to make sure you’re taking full advantage of a seller’s market is to work with an experienced Realtor. This way, you will know just how high you can price your home and what offers are worth a second look. You’ll also need to cultivate some patience. If this is your first time selling a home, you may be tempted to jump at the first offer you get. But hold on just a little. If it’s a true seller’s market, you could well receive a higher offer tomorrow and a better one the day after that.

Finally, if you’re needing to buy a home as well as sell one, look into the possibility of a leaseback, where you arrange to rent your former home from the new buyer for a month or so. This may work well for a buyer who felt pushed into making a quick purchase in such a hot market but still needs a little time to find their next home.

But what if you’re planning to buy?

If instead of selling you’re wanting to buy a home, your first best step, again, is to find a good Realtor. A knowledgeable professional can help you find the right homes at the right price as soon as they hit the market and to write a competitive offer. You should also make sure to be preapproved so the seller will know right away that you’re capable of backing up the offer you make.

If you can afford it, you can even include an escalation clause with your offer, specifying just how much you’re willing to come up with to top any competing offers. Even if you’re not made of money, it can help if you’re willing to be flexible with your move-in date. A seller may be willing to take your offer over another, higher one, as long as your timetable matches his own.

If there is any way we can help you navigate this ever-changing market, do not hesitate to reach out. We look forward to hearing from you.

Jennifer Gerson is an experienced realtor and marketing professional. Driven by her love for the industry and for her community, she takes pride in providing the best experience possible. She is a part of The Mayers Group team. Contact Jennifer at 305.796.0443, email Gerson.j@ewm.com, or visit themayersgroup.ewm.com.

Author: TFVstaff

the authorTFVstaff
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