Understanding Real Estate Markets


Real estate is an ever-changing market that can seem daunting at first glance. However, understanding the market doesn’t need to be overwhelming. Once you know the basics, you can use that knowledge to understand the real estate market in any area. Before making an offer or considering an investment, you should do your research about whether you are in a seller’s, buyer’s or balanced market. You can research this information on websites like Realtor, Zillow or by reading information written by industry experts like Paul Daneshrad.

Seller’s Market

The real estate market is determined by supply and demand. A seller’s market means that there are more buyers than there are sellers. This means that homes are often listed at higher prices, competition is tough, and properties are sold quickly. Factors that contribute to a seller’s market include new business opportunities, expanded highway systems or a growing job market.

Buyer’s Market

A buyer’s market is the opposite of a sellers. In this situation, there is a large supply of properties, so buyers have the advantage. A buyer’s market often requires more work from a seller, as they have to compete for buyers’ attention and offers. Properties are often sold below appraisal value while in a buyer’s market.

Balanced Market

A balanced market has a balance of supply and demand. The number of buyers is equal to the number of properties on the market, which means neither party has an advantage over the other. This kind of market is the least common and usually doesn’t last long before returning to a buyer’s or seller’s market.

There are many online resources that explain how to determine the real estate market by measuring things like price cuts during listing periods, mortgage interest rates and days on the market. It’s important to do your research whether you are a buyer or a seller.