Decoding the Real Estate Market for Homebuyers
In real estate, the type of market you’re buying in can significantly impact your experience, from shopping to writing offers, negotiating repairs, and finally, closing the deal.
Terms like "buyer’s market," "seller’s market," and "balanced market" are commonly used, but what do they really mean for you as a buyer? Let’s break it down in a way that makes sense and show you how knowing the type of market can help you approach your home search with confidence.
Real estate agents, like us, rely on data, intuition and word of mouth between agents to assess the kind of market you’re entering. This combination of market analysis and hands-on experience allows us to guide you through the process, adjusting your strategy for the best outcome. Now, let’s explore what these markets mean and how they might affect the journey for our example couple, Sarah and Jake.
The Three Types of Real Estate Markets
Buyer’s Market
Seller’s Market
Balanced Market
Let’s dive into what buying a home looks like for Sarah and Jake in each of these markets.
Scenario 1: Buying in a Buyer’s Market
A buyer’s market happens when there are more homes for sale than there are buyers. This gives buyers the upper hand. Home prices tend to be lower, properties sit on the market longer, and sellers are often more willing to negotiate.
Sarah and Jake in a Buyer’s Market
Sarah and Jake are excited to buy their first home and are in luck—it’s a buyer’s market. With plenty of homes available, they can take their time to find the right fit without feeling rushed. They fall in love with a home that has been sitting on the market for a few months. Confident that they’re in a good position, they offer below the asking price, knowing that the seller is motivated to make a deal.
In this market, Sarah and Jake also have more leverage when it comes to repairs. Since there aren’t many competing buyers, the seller agrees to cover the costs of several requested repairs. Overall, the process feels relaxed, and Sarah and Jake feel like they have plenty of room to negotiate.
Scenario 2: Buying in a Seller’s Market
A seller’s market is when there are more buyers than homes for sale, which gives sellers the advantage. Homes tend to sell quickly, often above asking price, and buyers face competition.
Sarah and Jake in a Seller’s Market
Now, imagine Sarah and Jake are house hunting in a hot seller’s market. They find a home they love, but so do several other buyers. To stand out, they offer above the asking price and waive some contingencies to make their offer more attractive.
When it comes to repairs, the seller isn’t willing to negotiate much, if at all. Since they’ve got multiple offers, they can afford to be firm. Sarah and Jake need to decide whether they’re comfortable moving forward without certain repairs being addressed or if they’re willing to walk away from the deal. In this market, things move quickly, and Sarah and Jake have to act fast and stay flexible.
Scenario 3: Buying in a Balanced Market
A balanced market is when the supply of homes is roughly equal to the demand. Neither buyers nor sellers have a strong advantage, and the pace of sales is more moderate.
Sarah and Jake in a Balanced Market
In a balanced market, Sarah and Jake find that the process feels more even-handed. They’re able to shop around without feeling rushed, and when they make an offer, they offer close to the asking price. The seller is open to some negotiation, and both parties agree on a fair price.
When it comes to repairs, Sarah and Jake request a few fixes, and the seller is willing to address the major issues. They don’t get everything they ask for, but they also don’t feel like they’re making big sacrifices. It’s a fair, straightforward process with room for compromise on both sides.
What Does This Mean for You?
Whether you're buying in a buyer’s market, a seller’s market, or a balanced market, understanding the type of market you're in can help you manage your expectations and make informed decisions. Your agent will have the data and experience needed to navigate the process and guide you through negotiations to help you achieve your home-buying goals.
At Campbell Salgado Real Estate Group, we believe that buying a home should be an exciting and smooth experience—no matter what the market looks like. With over a decade of experience in the Portland and Vancouver metro areas, we’ll help you make sense of the current market conditions and guide you through every step of the process. Whether it’s a buyer’s market or a seller’s market, our goal is to help you find the home that’s right for you.
Have questions about what market we’re in right now or ready to start your home search? Text or call us at 503-951-8547. We’re here to help!
