Real estate, like most commodities, is a supply and demand market. Low supply and high demand create a tight market. High supply and low demand create a saturated market.
During a saturated market, there are an abundance of properties. That abundance gives buyers their pick of properties and makes sellers compete to get one of the few buyers out there. That competition drives prices down and the condition of the properties up as sellers search for an edge. Buyers have all the control resulting in the real estate term “Buyer’s Market.”
Tight markets have few properties to choose from and too many buyers for those few properties. That can create multiple offers on properties and bidding wars between buyers as they compete for the property. Tight markets drive home prices up, increase the number of cash offers and decrease the contingencies in contracts as the buyers try and get the sellers attention. Not every buyer can find a property to buy, however. They end up watching the market and waiting for another home to come along. Sellers have all the control in this market, thus the term “Seller’s Market.”
Our market is definitely a Seller’s Market. Inventory is low and demand high. Prices have been pushed up over the summer and we have buyers waiting on the sidelines for a property. This time of year our inventory levels drop as many sellers or would-be sellers rent their properties for ski season or use them themselves and they wait until after ski season to put it up for sale. Our buyer demand goes down somewhat too because buyers are too busy skiing and enjoying winter in Summit County. They don’t bother with looking at real estate. This winter will be a little different. There are a lot of buyers out there that wanted a place last summer and couldn’t find one. They are still waiting for something to come along. New listings over the winter months will get more attention than normal from those buyers. That extra demand will continue to fuel the increasing pricing and properties will continue to be snatched up relatively quickly. When next summer arrives, the supply of buyers on the sidelines will be somewhat depleted and there will suddenly be more properties on the market for them.
If you are considering selling your Summit County home, this year is a little different than years past. You’d be wise to list ahead of the competition and grab one of those buyers that missed out last summer. If you’re a buyer, hang in there, something will come along eventually.
The market condition is like a pendulum. It is never still; always moving from one type of market to another. We’re currently almost as far as the pendulum can travel in one direction. At some point, it will start to swing the other direction again.
Contact The Mountain Living Team today and make the most of the current real estate market.
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2016- A year of scarcity in residential real estate