The data is out for 2018, and Spring is definitely a seller’s market! Homes on the market are pretty scarce across the country, so that small supply means prices are going up!
Okay, this might be a little confusing for some, so let’s back up. A seller’s market simply means that the housing market favors the seller. The market is defined this way when houses are in short supply, demand is high, and prices are rising. In contrast, a buyer’s market is one where the housing market leans towards the buyer. Plenty of houses are on the market, demand is lower than the supply of houses on the market, and prices are lower or price increases are moderate.
In a seller’s market, buyers are ready to make deals. They accept the listing prices, the waive inspections, buy sight unseen, offer to cover closing costs, and generally have little room for negotiation. That all flips in a buyer’s market. Sellers are ready to make deals. They lower prices. The offer decorating allowances and other concessions.
Back to the current market.
As expected, reports are showing that buyers are offering bids well above asking prices. They are doing this without seeing the houses to beat other bidders to the table. Sellers are making big profits. Buyers are covering closing costs. If repairs need to be done to the house, buyers don’t care. That means it is a great time for sellers to dump houses they may need to fix up.
The hottest markets now are Seattle, Las Vegas, San Jose, Nashville, Salt Lake City, and Kansas City. But, most other cities in the United States are seeing this growth too.
The downside to this kind of market is that a current seller might also be a potential buyer once they unload their house. You may be able to easily sell your house but have a very difficult time finding a new one. Or paying a price that doesn’t eat up the profit you made on house you sold.
It is possible to find markets that are flat. Hartford, Connecticut, Toledo, Ohio, Baton Rouge. Louisiana, Philadelphia, Pennsylvania, and Baltimore, Maryland are all sluggish markets that are definitely good places for buyers. That is good for people who are moving there. It is also great for investors, because they can sell property in the big seller’s markets, and buy up property in these other markets.
Many millennials have finally saved up enough money and are first time home buyers. They have started families and are looking for places to settle. So, they are motivated buyers.
Existing home owners in generation x and the baby boomer generation are holding on to their homes. GenX is concerned about rising interest rates and home prices. While they want to move to bigger homes, it doesn’t seem like the best move right now. Baby Boomers are holding off retirement and holding out for more money. So, like with every market, you see winners and losers!