Term Of The Day: Seller's Market
In the context of real estate, a "seller's market" is characterized by a shortage of homes. In other words, seller's market is a market characterized by demand exceeding supply.
PropTiger Explains Seller's Market
In a seller's market, relative to supply, the demand for homes is high. So, residential property prices are higher. As people spend more on homes in a seller's market, more buyers will compete for homes, driving up prices.
Ideally, you should not buy in a seller's market because you might spending more than you otherwise would. The phrase "seller's market" indicates that the market condition is ideal for sellers. In a "buyer's market", supply of homes exceed demand. Low mortgage rates are a reason that contribute to the existence of seller's markets. When mortgage rates are high, a buyer's market is likely to emerge.
While pricing your home, it is important to know whether you are in a seller's market or a buyer's market. If a seller is not aware that he is in a seller's market, his home will fetch him less than what it deserves.
In a country, at a certain point in time, there might be many seller's and buyer's markets, and this greatly influence the decision of households to migrate from one part of the country to another.
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