Seller’s Market

The market is in the seller’s favour:

  • Many buyers – lots of buyer enquiry, lots of people attending open homes
  • High clearance rate at auctions
  • Shortage of properties for sale relative to demand
  • Finance readily available
  • Homes sell quickly ie. 1-2 weeks
  • Prices increase due to competition between buyers

 

Buyer’s Market

The market is in the buyer’s favour:

  • Few buyers compared to availability of stock
  • Auction clearance rates drop – properties are passed in
  • Homes tend to remain on the market longer, say 3-6 months
  • Price reductions are common, until the correct market price is reached
  • Buyers have more time to look for a home
  • Buyers are able to gain the upper hand in price negotiations

Balanced Market

A sense of equilibrium or stability between buyers and sellers:

  • Demand equals supply
  • Sellers accept reasonable offers
  • Homes sell within reasonable time frame, say 30 days
  • Prices generally stable
  • More relaxed atmosphere
  • Reasonable number of homes to choose from

 

When you are planning to sell your property, it is important to consider which type of market we are in because this will determine which marketing strategy you should use. The market is driven by human emotions 3 – we tend to make decisions emotionally and then justify them with logic.

 

In a seller’s market you can be a bit more ambitious with the asking price. Lets assume your property is likely to sell between $800,000 – $820,000:

  • in a seller’s market you could list your property for $850,000 and probably get offers
  • in a buyer’s market, the asking price would probably need to be $825,000 to attract genuine buyers, $850,000 would just scare people away

 

Genuine buyers want to deal with a genuine seller, not someone that is going reject their offer and hold on until they get an unrealistic price. In a buyer’s market they have choice and they have time on their side.

 

To read more about how the market cycle and the property clock, click here.

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