So you’ve checked your credit score, you feel confident in your finances, and you’re ready to start your home search! You’ve scoured Zillow, Trulia, and other listing sites for homes, and you have a list of potential houses to see.
But wait: is this a good time to buy? How do I know I’m getting a good deal? And why do houses seem to be disappearing overnight?
Before you go crazy making appointments to see houses, consider speaking with a professional about your home search. Realtors are great resources for information, and you should always consult with one before diving into a contract. Two big things they can help you understand are the difference between a buyer’s market and a seller’s market and how both cycles affect the homes available to you.
What do you mean there are different markets?
The real estate market is full of ups and downs, similar to a roller coaster. Changes are controlled by the law of supply and demand, and contributing factors include area, seasons, and the financial market. That’s right, it’s ECON 101 all over again!
With real estate markets, you want to focus on “housing supply” and “housing demand”.
An agent can walk you through the specific factors that affect the market of any neighborhood you’re investigating. But, here is a guide to understand the features of each market and what to expect when buying.
What is a buyer’s market?
In a buyer’s market, housing supply exceeds housing demand. In other words, the supply of homes for sale is higher than the supply of buyers searching for a home.
Sellers may see their property sitting on the market longer (about 6 to 9 months), and prices/negotiations are favorable for buyers. Sellers may often get crafty to sell their home ahead of the competition with home staging, incentives, etc.
What is a seller’s market?
A seller’s market is the opposite of a buyer’s market: so many buyers are searching for homes that their demand exceeds the supply of houses for sale.
As there are often multiple bids on each property (also known as “bidding wars”), buyers may have to spend more than they want to beat the competition. Homes sell quickly—sometimes in hours or days—and showing appointments must be made ASAP to avoid a house selling before you can even see it.
Is there anything in between these two markets?
Yes! A market that has equal amounts of buyers and sellers is a balanced market. In this situation, home prices can remain stable and bidding wars are reserved for special situations.
So what does the current housing market look like?
This is a great question with a vague answer: it depends on where you’re looking. The housing market can vary by city or state, taking into account factors such as cost of living, schools, neighborhoods, etc.
Northwest Indiana is a sought after region! Many Illinois residents are moving to Lake, Porter, LaPorte, and Jasper Counties as public transportation and other infrastructure improvements make it possible to commute to Chicago from out of state.
Additionally, the South Shore CVA lists lower taxes, great schools, and increasing home values as factors that have piqued the interest of buyers. With all of this in mind and median home prices on the rise, it’s fair to say Northwest Indiana is currently experiencing a seller’s market.
However, as previously stated, the market oscillates frequently. While the current market will ideally last through the end of the year, 2020 could bring Northwest Indiana much different circumstances that affect home sales.
Supply and demand are the main factors that influence the housing market. When buyer demand is high and selling supply is low, we have a seller’s market. When demand is low but supply is high, we experience a buyer’s market. And, when supply and demand match, we have a balanced market.
Northwest Indiana is currently experiencing a seller’s market, with many regional features creating a high demand from buyers and driving up median selling prices.
Each market comes with its own benefits and challenges, and seeking a home at the right time can be crucial to getting a good deal in your dream neighborhood. Speaking with a professional about your home search should be at the top of your list of priorities before you start!