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.
Check out PropGuide's comprehensive guide to real estate terms here.
Blogs Related To Seller's Market
Buyers Real Estate Investing in real estate Term Of The Day Selller's Market