Seller's Market vs Buyer's Market
We get a lot of questions about a Buyer’s market versus a Seller’s market and what the demarcation line is for the Ocean City real estate market. In this article we will explain Buyer’s and Seller’s markets, how they are established and what to expect in each one.
Absorption rate will be referenced several times in this article. Absorption rate is the time it would take to sell all of the Ocean City homes currently for sale on the market at the current sales pace. The current sales pace is the average monthly sales for the most recent twelve month period.
SELLERS MARKET
A seller’s market occurs when Buyer demand is greater than the supply of homes for sale. In the Ocean City real estate market, a Seller's market occurs when the absorption rate is less than five months.
Seller’s markets are competitive amongst Buyers. There will be multiple offers submitted on the desirable new real estate listings that come on the market. Buyers will compete based on offer price, as well as contract terms and contingencies.
BUYERS MARKET
A Buyer’s market occurs when the supply of homes for sale is greater than Buyer demand. A Buyer’s market occurs in the Ocean City real estate market when the absorption rate is higher than seven months.
Buyer’s markets are less competitive than Seller's markets and are an ideal time to buy. Buyers will have more leverage in regards to offer price, contract terms and contingencies in a Buyer's market.
NEUTRAL MARKET
A neutral market occurs when the supply of Ocean City homes for sale and Buyer demand are in balance. A neutral market occurs in Ocean City when there are five to seven months worth of inventory on the market.
Advantages in a neutral market will vary based on the property. If it is a desirable listing in a market area with low inventory, the Seller will have the negotiating advantage. If it is a listing in an area with ample inventory, the Buyer will have the negotiating advantage.
We have a variety of tried and true strategies that we have used to successfully navigate our clients through these various real estate markets. If you have any other questions or want to discuss the current real estate market in greater detail feel free to contact me directly anytime at 443-614-9179.
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