Trends & NewsIs it a Buyer’s Market or Seller’s Market? by Daniela Andreevska September 24, 2016January 28, 2019 by Daniela Andreevska September 24, 2016January 28, 2019So, you have made the important decision to be a part of the vast world of real estate investing? You already own one or few rental properties? Or you have just started looking for your first investment home? In any case, whether you are new to real estate investing or have rich experience in the business, don’t forget to study the US housing market before you make your next investment move. Before you decide to sell or buy a rental property, you have to answer one very important question: Is it a buyer’s market or a seller’s market right now? Don’t make the same mistake that so many people make by not studying the current state of the housing market.To begin with, what is a buyer’s market and what is a seller’s market and how do we distinguish between the two?What’s a Buyer’s Market?A “buyer’s market” – or a cold real estate market – is a market in which conditions favor those willing to buy a property. Even without being an expert on economics, you might have guessed that this happens when more people are trying to sell their homes (or rental properties) than those who are looking for a home (or rental property) to buy. A buyer’s market leaves buyers with a wide range of properties to choose from and little competition to struggle with. Buyer’s market is especially good for first-time home buyers or people just starting with real estate investing as it allows you to buy your dream property at a lower price.Now that we know what a buyer’s market is in principle, let’s see how we can know that it’s a buyer’s market now.Features of a Buyer’s Market:More properties on the market than in past periods6 months or more of inventory on the marketListed properties spending more time on the marketCurrent listing prices below previous sales pricesLower overall closing percentageFalling average house pricesFlourishing real estate ads trying to attract buyersMashvisor offers nationwide listings to easily find and analyze investment properties. A buyer looking for an investment property can view projected returns when viewing any property.So, if it’s not a buyer’s market at the moment, is it a seller’s market?Related: Expert Tips for Investment Property & Home Buyers What’s a Seller’s Market?Well, a seller’s market – or a hot real estate market – is the opposite of a buyer’s market. This is when conditions are in favor of those selling a property. A seller’s market materializes when more people are trying to buy a property than those who are willing to sell at the moment. Of course, this must benefit the few ones who are looking forward to selling their home. In a seller’s market buyers would be ready to pay a higher price than the listed one in order to secure themselves the property they want. It’s good for sellers as they are likely to make a quick sale at a higher-than-expected price.The signs of a seller’s market are the reverse of a buyer’s market.Features of a Seller’s Market:Fewer properties on the market than in past periods3 months or less of inventory on the marketListed properties spending less time on the marketCurrent listing prices above previous sales pricesHigher overall closing percentageRising average house pricesLess impressive real estate adsMashvisor allows you to explore thousands of listings in numerous US cities and neighborhoods.But what if it is neither a buyer’s market nor a seller’s market? Well, then it’s a neutral real estate market.Related: 5 Skills Needed For Real Estate InvestingWhat’s a Neutral Market?A neutral property market, or a balanced real estate market, is when the prevailing conditions favor neither buyers nor sellers. Generally, it means no major changes in demand, supply, and prices.Features of a Neutral Market:Average number of properties on the market compared to past periods3-6 months of inventory on the marketListed properties spending regular time on the marketCurrent listing prices similar to previous sales pricesStable average house pricesRegular real estate adsStable number of sellers and buyersNow we come back to the original question which we are trying to answer here: Is it a seller’s market or a buyer’s market in the US right now? Experts seem to agree that the current US housing market tends to favor sellers. This means that for those engaged in real estate investing, now is the right time to sell a rental property rather than to buy a new one.Here Is Why It Is Most Probably a Seller’s Market in the US Right Now:Property supply is low. The housing market has shifted from vast oversupply to what looks more like a shortage in 2016. The inventory of all homes for sale has gone down by more than 35% in the last 4 years. That’s great for existing homeowners as it means that their homes are in high demand at the moment.Prices have been on the rise. After prices hit the bottom 4 years ago, they started steadily going back up. Actually, nationwide levels are forecast to reach all-time peaks as those seen during the housing bubble.Job growth has been strong. The economy is set to achieve full employment in coming months. In addition, wages are increasing. All this means that working people will be able to afford to take loans to pay for their newly purchased properties.Mortgage rates are not expected to go much beyond the 4% level. Combined with an improving job market, this is good news for those looking to sell their home.Millennials are now starting to buy homes. This is the largest generation in the US till now, and once they enter the housing market, demand will be huge. Moreover, it still remains more beneficial to buy your own home instead of renting, so this puts additional upward pressure on demand.If these arguments have been enough to convince you to explore the possibility of selling your own rental property, make sure to perform a proper real market analysis.Related: How to Perform A Real Estate Market AnalysisOf course, we should also remember that the US housing market is not a homogeneous one. Different states and regions are likely to experience some major differences, so while one state might be a seller’s market at the moment, another one might just as well be a buyer’s market. Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL Buyers MarketMarket AnalysisSellers Market 0FacebookTwitterGoogle +PinterestLinkedin Daniela AndreevskaDaniela is Marketing Director at Mashvisor. She has been writing about real estate investing for a number of years. Previously, she worked in economic policy research and fundraising. Daniela holds a Master degree in Middle East and Mediterranean Studies from King’s College London. Previous Post How Much Can I Rent My House For? Next Post How to Get Started in Real Estate Related Posts Winter: The Best Time of Year to Buy a House for Investment Washington DC Real Estate Market Trends 2020 The Best Real Estate Apps of 2018 Only 43% of Americans Would Take on a Fixer-Upper 6 Things You Need to Know About iBuying Should You Be Shorting Real Estate Right Now? What the 0% Interest Rate Means for Mortgage Rates House Price Trends to Expect in the US Real Estate Market 2019 4 Multifamily Real Estate Predictions for 2021 When will the US housing market prices go back to normal? Baltimore Real Estate Market Trends 2020 Is the Current Housing Market Favorable for Real Estate Investments?