What Does A Seller's Market Really Mean?Read on to learn more about how you can benefit from selling your home in today's market.
If you’ve even given a second thought to whether or not you should sell your home, now might be the best time to reconsider. To put it plainly, a seller’s market is when there are fewer homes for sale than there are buyers, or demand exceeds supply. This gives the seller the power in the transaction. For example, according to the C.A.R, in California in May 2021 the inventory of homes on the market for active buyers was at a 1.8 month supply, while on average a six-month supply is needed to maintain a neutral market. In addition to that, the median number of days on the market was at only 7 days.
How Did This Happen?
During the fallout of the Covid-19 pandemic, several key factors began to take place that contributed to this demand. With more and more companies implementing a work from home approach, people began to get eager to get into a larger home, or even out of their apartments into their first home. In addition, the largest generation, millennials, are seeking to move into their first homes.
Also a major contributor to the increase in buyers is the historically low mortgage loan rates. According to Freddie Mac, in July 2021, 30-year fixed mortgage loan rates were at an average of 2.9%. To put that into perspective, in January 2020, the average 30-year fixed mortgage loan rate was 3.62%, and in January 2019 it was 4.46%.
How You Can Benefit From A Seller’s Market
One of the main ways you can benefit from selling your home in a seller’s market is leverage. With a supply of buyers already ready, willing, and able to purchase your home, this competition leads to bidding wars in favor of the sellers. In response, all cash offers, less contingencies, and offers above the list price are all acceptable options for making an offer more favorable to the seller. Also because of this demand, homes sell significantly faster in a seller’s market.
If you’re ready to move forward with the next steps in selling your home, you will first want to obtain a CMA, or a Comparative Market Analysis, to determine the current value of your home. Katz Group LA provides free in-home consultations, and will help you take care of everything you need to sell your home with ease.