What Is A Hot Seller’s Market?
Since 2020 you may have been hearing that we are in a “hot seller’s market” or “seller’s market.” But what does this term actually mean and how is it defined?
If you have been thinking about buying or selling, or really just watching the news, you probably know that we have been in a hot seller’s market. This means that people are selling in large numbers and the real estate market is set up to support that.
But what does the term mean and what goes into defining it? What indicators have to be present for it to be a seller’s market?
Supply Is Low
One of the biggest indicators we are in a seller’s market is when the inventory of available homes in a neighborhood, town or state is very low. Because the number of houses on the market is low there is more competition amongst buyers to snatch up those available properties. This gives sellers the leg up in the interaction because they have what everyone is looking for. This will allow sellers to ask for and receive higher prices and allow them to choose from a number of offers.
Demand Is High
Sometimes a hot seller’s market can manifest when demand becomes suddenly high while the supply stays the same. When COVID-19 hit in 2020 many people took a look at their current living situation and decided they wanted more space to live in or to move away from the city. Many people were suddenly working remotely and could move out of their small and expensive city homes. This sudden change drastically increased the number of buyers in the market for a new home. The increase in demand made housing prices shoot up for sellers.
Interest Rates Have Decreased
Another way a seller’s market can manifest is when interest rates drop. When interest rates are low more people are looking to buy. More buyers means that sellers have a lot of options and increased interest in their properties.
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