The Buyer’s And Seller’s Market
In real estate, there’s a simple, somewhat lazy, rule of thumb when it comes to describing who’s in control. It’s either a buyer’s market or a seller’s market. If you’re not familiar with these terms, here’s a quick rundown:
Less than 5 months of inventory (also called absorption rate) = seller's market
Between 5 and 7 months of inventory = balanced market
More than 7 months = buyer’s market
Because of several factors in the past decade, there are currently fewer homes for sale, which puts us in a sellers market. However, this situation doesn’t give a complete picture of the market since it doesn’t consider the demand. Just having a low number of homes available doesn’t necessarily mean there’s a high number of buyers at all price ranges.
For instance, at the end of July, Bend has around 95 homes on the market between $700K - $800k. Out of these, only 30 are currently under contract. Despite recognizing affordability challenges in today’s market, sellers in this range may not realize the buyer-friendly landscape. This misperception, along with limited awareness of buyer options, can lead to unmet expectations, arising from a mistaken assumption of a seller’s market.
To get a better understanding of all of Central Oregon, here is a breakdown of which price points most favor the buyer and seller for each city:
So, other than using this information to impress your co-workers around the water cooler, what do you do with this information?
If you’re a buyer right now:
Make sure you understand what to expect at the price you’re looking at. Will you have lots of choices or do you need to move fast and make a strong offer?
If you are shopping at a competitive price point, do you have an approach that allows you to compete in multiple offer situations?
If you’re planning to sell soon:
Getting the price and preparation right is vital. Do you want your home to be among the few under contract, or do you want it to be among the ones still waiting?
Understand the market at your price range. Misunderstood expectations can make the selling process frustrating.
