In many ways, jumping into the housing market is like merging into traffic: You have to look for the perfect time — but if you wait too long, you’ll miss your chance.

To find out when that “perfect time” is, it’s important to understand the evolving landscape of the real estate market. You’ll need to know how it changes in response to buyer habits or supply and demand. Once you have all the facts, you’ll feel more confident listing your home — and, better yet, you’ll be more likely to get the best possible price.

Pull out your notebook and sharpen your pencils, because today you’ll learn about one real estate condition all home sellers dream of: a sellers market.

What is a sellers market?

The housing market, like any other market, rises and falls. It also varies from place to place, meaning the local and national markets may not perfectly align. These fluctuations can depend on a variety of factors, including:

  • Creation of new inventory.
  • Supply and demand.
  • Mortgage rates.
  • Home values.
  • Buyer interest.

As these factors adjust to reflect world events and financial conditions, the real estate market is impacted in various ways. The result is a spectrum with two extremes: a sellers market on one end, and a buyers market on the other.

A sellers market, as the name suggests, favors home sellers. It occurs when supply can’t keep up with demand — for example, when new inventory isn’t being built in a certain area. For a home buyer looking to find a place to live, that means any available house is a valuable commodity.

A buyers market, on the other hand, occurs when supply is much higher than demand and available homes are everywhere. This overabundance of inventory favors buyers, who now have the freedom to pick and choose between housing options.

No matter what the current conditions in your area, the good news is that no real estate market is permanent. Instead, you enter into a cycle where values, supply and demand, housing costs and other factors are constantly changing the game. Your biggest challenge is to survey the landscape before jumping in, helping you understand what you and other home sellers should expect, how potential buyers may respond and when the market may change again.

How a sellers market affects home sellers

Since so many factors influence housing prices and availability, you’ll need to act fast to take advantage of a sellers market.

Luckily, there are plenty of motivators to get you off the couch and ready to clean, repair or otherwise prepare your house for sale. Here are just a few things you can expect when yours is one of only a few available homes:

  • Higher prices: During situations where supply is low and demand is high, home sellers can slap bigger price tags on their real estate. If buyers want housing in your area, they won’t have a choice but to pay up.
  • More competition: Another benefit of a sellers market is that you’ll have no shortage of potential buyers. Rather than waiting weeks or even months for an interested party, you could have a dozen showings in a week and, depending on the intensity of the market, maybe even multiple offers on day one.
  • Motivated potential buyers: When available homes are few and far between, potential buyers are more likely to overlook imperfections. Their definition of a “deal-breaker” is likely to become more flexible — which means that, even if your home isn’t in perfect condition or has some undesirable traits, you’re likely to find a buyer who’s happy to overlook the details.

Of course, you aren’t the only player in the real estate landscape when trying to sell your home. As such, it’s often helpful to understand the market from the opposite perspective, too.

How a sellers market affects home buyers

For buyers, a sellers market can look somewhat bleak. Their target area is probably desirable, which means they’re not the only ones hunting for available homes. Here’s how the landscape looks from a buyer’s point of view:

  • Fewer options: Some buyers like to cruise the real estate market for months, thoroughly investigating each house and taking stock of the inventory. In a sellers market, this often isn’t possible. Fewer options force potential buyers to take what they can get rather than holding out for perfection — which often translates to less hesitation and faster deals.
  • Higher expectations: To stand out in a sellers market, potential buyers often need to sweeten the deal. Sometimes this means offering more than the asking price, making a cash offer or promising a quick turnaround time.
  • Higher prices: If a buyer absolutely has to move in the middle of a sellers market, they likely already know they’ll be paying more for real estate. Of course, if they’re moving from a location also experiencing a sellers market, they’ll have benefitted from it themselves — meaning they have plenty of cash to pour into a new home.

In short, any home buyer is at a disadvantage in a sellers market. However, the importance of a safe, problem-free home often outweighs the cost.

How to determine if you’re in a sellers market

Understanding the housing market is key to getting the best price, the fastest deal and terms that benefit you as a seller. To determine whether you’re in a sellers market, look for these telltale signs:


Are new houses being built by the hundreds in your area, or has construction come to a standstill? The latter might mean you’re sitting comfortably in a sellers market. Similarly, if the availability of existing homes is low, that’s good news for you.

Housing prices

To understand the real estate market, you’ll need to do research on past and present housing prices in your area. Do this for all properties, not just those comparable to your square footage or lot size. This will help you get a complete view of market conditions — and if prices are trending upward, the chances are high that the market is favoring sellers.

Buyer habits

Another way to evaluate the housing market in your area is to watch buyer habits.

For example, if your city was just rated as one of the best places to live in the nation, you’re likely to see a home buyer migration as everyone comes looking for all those local wonders. This is reflected in rapid home sales, sharply increasing demand, purchases made at prices you may not have expected for your area and more. The result is a market where newcomers are willing to pay for what they see as your little slice of paradise.

Simplify the selling process with Bungalo®

If the terms “buyers market” and “sellers market” are bouncing around in your head and you can’t stop stressing about supply, demand, inventory and financial conditions, you may be thinking that being a seller is a lot of work.

We’re not going to lie to you: It is.

Luckily, when you sell your home with Bungalo, you don’t have to worry about any of that. We don’t just give you a great price — we also take care of quick fixes and large-scale repairs alike, so all you have to do is hand over the keys.

Check us out today to see why buying and selling with Bungalo is as easy as going home!

This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Bungalo always encourages you to reach out to an advisor regarding your own situation.

Comments are closed.