Understanding the Seller’s Market

The seller’s market is a way of describing an overall trend in real estate and property values. In short a seller’s market simply means that the seller of a home is in a position of power and can usually ask a high price for their home. What this means for the buyer is that their options will be limited and there will be a lot of them all competing to snatch up the few properties that are available on the market at any given time.  Now that you understand what a buyer’s market is, let’s look at some of the factors that lead to this situation.

If you take any major city there are always good areas and bad areas. The well-established good areas are desirable and there are always people looking to move into these neighborhoods. If that’s the case then it's safe to say the people living there are happy to be living there and not many of them want to leave. This means that there’s a long waiting list for people who want to love in and as soon as something is available on the market in this area everyone jumps on it.

This highly competitive atmosphere gives the seller all the power. Often they can ask over inflated prices for their homes knowing that someone out there is rich enough to pay what they are asking simply because they want to move into that area. This also creates a buying frenzy among people who want desperately to move into the area and this can lead to bidding wars and even offers that are higher than the original asking price.

For someone with a lot of money who has been waiting patiently for an opportunity to own a property in this area it only makes sense that they will pay a higher amount than the actual market value. But if your plan is to buy and sell fast it's rare that you’ll find a really cheap deal if it’s a seller’s market. You may consider a slightly less in-demand neighborhood.