A seller’s market is generally determined by a few different aspects. It is usually mentioned when the market is running hot and prices are on the up. But, the basis of a seller’s market is simply supply and demand.

When there is less supply and high demand for property, you’ll find yourself in a seller’s market. This means that the amount of properties listed is low compared to the number of buyers looking to purchase. With an increase of buyers viewing and competing to buy a single property, the selling price of that property will be greater than if buyers were spread between multiple properties.

Generally, a seller’s market is driven by the interest rates. When interest rates are low, and loans are easier to service, then more people have an opportunity to purchase property. On the other hand, current owners may refinance their property and have less urges to sell as living is much more affordable. As the market begins to have a growth spurt in price, more home owners will us the increase in equity in their property to purchase rather than sell and buy. This is in part the reason why there are less properties on the market through these times.

In the midst of a hot market, buyers, especially the inexperience, may find themselves with a lot of pressure to purchase. The notion that property will only go up and they need to get in now, is generally driven by the emotion of losing. This emotion of losing will put a false pressure on buyers to act immediately and perform. Even if it means living well outside of their means. Basically, people think very short term and blind themselves to doing any research on how markets traditionally go up and down based on interest rates, economic status and supply and demand.

 

DISCLAIMER

The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.

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