Real Estate Today: Good Real Estate Market – Bad Real Estate Market

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(Last Updated On: January 7, 2015)

By Maria Willmore

Maria at Door 2When we hear the phrases, “A good real estate market” or “A bad real estate market”, these are phrases we hear with specific meanings to the individual.

A good real estate market actually means two things to two different types of clients. To the seller, a good real estate market means he/she can realize the best return on his/her investment. The seller wants to make the most profit in selling the property.  To the buyer, a good real estate market is a market allowing him/her to get the most investment for the least amount of money. A bad real estate market means either a seller or buyer isn’t favored.

Let’s review client A, “The Seller”. What happens in a real estate market to favor the seller?

There are more buyers than houses available to be purchased. If the market is in favor of the seller, serious buyers are willing to pay full price or sometimes more than the asking price for a home in great demand. Because there are several offers on the home, the seller may actually be able to sell for more than the list price because there is less inventory than buyers. Yet, absolutely no home should ever sell for more than an appraised for value. Remember these terms, “inventory” and “appraised for value.”

As a novice, your question is, How can I determine a seller’s market?”

•Low Inventory

•Not as much real estate advertising

•For Sale signs are not in yards very long before showing pending or sold riders

•Most inventory doesn’t last more than 4-6 months

Now, let’s discuss client B, “The Buyer.” What happens in a real estate market in favor of the buyer?

This can be, of course, by far, the best market for a buyer. Sellers need you and so do financial institutions. Therefore, you are being courted by both. Financial institutions (mortgage companies and banks) need to write loans and there is an over abundance of homes for sale flooding the residential real estate market.

The good news is, there have been better laws put in place to keep buyers from being taken advantage of by the lending institutions.

As a buyer, your question is, “How do I know it is a buyer’s market?”

Many homes are flooding the market to be sold.

•For sale signs stay up in front of homes longer and that are not moving.

•Fewer buyers are purchasing homes.

•Sales prices are declining in many areas.

•Newspapers have more ads and in many cases, the ads become larger as display ads.

What, then, is really the best market? Both markets are good markets, depending on your being the buyer or the seller.

It is the experience of the realtor to know which market better suits you as the buyer or the seller. As you can see, one good market may favor the seller and the other may favor the buyer. Your experienced realtor will let you know, “Good market or bad market” based upon who you are as a seller or a buyer.

There is another market, the balanced market. The balanced market is a market that favors both the buyer and the seller. It is what many would consider a win-win situation. A good realtor makes sure all transactions work in favor of the client he/she represents.

There really isn’t a true good real estate market or a bad real estate market. Each market favors either the buyer or the seller or both. A good realtor makes sure it is a good market for the client represented, based upon the knowledge known by the realtor.

Maria Willmore has over 20 years in the real estate industry with experience in listing and selling homes throughout the Houston and surrounding areas. Her primary market is metropolitan Houston including Harris and all surrounding counties because of her familiarity with a range of markets.  Because of her travels throughout the United States, she is quite familiar with other markets and finds it quite easy to work with out-of-town and state clients. She works with first time home buyers, clients moving up to their next homes, and empty nesters.