A buyer’s market is when there are more than 7 months worth of inventory. If no other house were put on the market for sale, it would take 7 months or more to sell the current inventory. Another name for this is what is known as the absorption rate. During a buyer’s market, the sellers tend to have less negotiating power. Buyers tend to come in lower than list price. Once they do their home inspection, they will negotiate a little harder for repairs and or credits.
With this being said, even when we were in a buyer’s market in San Diego, our listings in North Park, South Park, Mission Hills, and other metro communities were still receiving multiple offers. We were still receiving higher offers than the seller originally asked for. The reason for this is that we made sure to prepare the home to look as lovely as possible and better than all of the other homes that we were competing within that price range. Also, together with the sellers, we came up with a strategic market plan.
Because of this, homebuyers that lost out on our listings were sometimes confused. They did not understand why their low-ball offer did not receive a response. They just assumed that they would, and the sellers would negotiate. This was not the case. Many times, we still had bidding wars.
As a buyer, make sure that your Realtor knows the current market in the specific neighborhood that you want to buy a home in. This way, they will be able to give you the correct information. Not knowing this information can hurt you and your chances of getting into the home that you wanted in the neighborhood that you love.
If you are thinking a buying a home in the North Park, South Park, University Heights, Normal Heights, or other parts of the Metro Neighborhoods in San Diego, contact the McT Real Estate Group. We specialize in these neighborhoods. We will be able to guide you through the process of buying an older quaint home. These are the types of homes in these neighborhoods, and we are experts in selling them.
What is a Sellers Market
A seller’s market is when there are less than 6 months of home inventory. If no other home were to be put on the market, it would take 0-6 months to sell the current inventory. In San Diego’s Metro neighborhoods, such as North Park, South Park, and others, we see a 1.5-month absorption rate.
It is a seller’s market. This is not to say that just because it is a seller’s market, the seller can overprice their home when putting it on the market, and it will automatically sell. Homes are overpriced when they initially hit the market will sit there for months while other homes that are priced correctly sell right away. Those sellers eventually have to make price reduction after price reduction. Buyers will eventually start submitting offers that will be below the reduced listing price. The seller would have made more money had they gone on the market at market price. They would most likely have had a bidding war in today’s market. The price would have escalated, and they would have made more than they did by going on the market overpriced.
Today’s home buyers are smart. They have all of the information at their fingertips. Buyers know when a home is extremely overpriced. They will wait until the price is more realistic before they consider making an offer.
If you are buying or selling a home in the San Diego Metro area, contact the McT Real Estate Group today. We are here to help.