What Market Are We In?

In the dynamic world of real estate, markets can be broadly categorized into two phases: a buyer’s market and a seller’s market.  These terms reflect the prevailing conditions and dynamics that influence the balance of power between those looking to buy and those looking to sell properties.

A buyer’s market occurs when there are more homes for sale than there are potential buyers.  This surplus of inventory gives buyers the upper hand, providing them with more choices and often the ability to negotiate lower prices.  Sellers may find their properties sitting on the market for a longer time, prompting them to make concessions to attract buyers.

On the flip side, a seller’s market is characterized by a shortage of available homes in comparison to the number of potential buyers.  This scarcity can drive up property prices, creating a competitive environment where sellers may receive multiple offers.  In such scenarios, buyers may face increased competition and pressure to make quick decisions.

For buyers, navigating a buyer’s market offers the advantage of a wider selection and favorable pricing.  In a seller’s market, buyers must act swiftly and decisively to secure a property amidst stiff competition.  Sellers, on the other hand, must adapt their strategies to align with the prevailing market conditions, whether it’s showcasing the unique features of their property in a buyer’s market or leveraging high demand to maximize returns in a seller’s market.  Understanding these distinctions empowers both buyers and sellers to make informed decisions in the ever-changing landscape of real estate.

In Lubbock, end of 2023 stats show a 3.4 month inventory, which by definition is a sellers market.  Not a strong sellers market, more of a “balanced and leaning in favor of the seller” market.   However, due to several years of a strong sellers market, this shift emotes the perception of a buyers market.  Buyers are under the impression sellers are extremely motivated and will consider every offer.  Possibly, but not always the case.  As we approach a balanced market, whereas the buyer and seller are on equal footing, it’s important to note prices are within market values and buyers have a healthy inventory to choose from.  As you read above, when the pendulum swings, one party benefits the other, not so….

Next week let’s discuss how perception may be deception…