The length of time that it takes for inventory to turn over has dropped to around three months, which is good news for sellers. This means that if there were no new homes listed for sale, it would take three months for all of the homes to be sold.
When new businesses open or current businesses add new workers, more people will be buying homes. People may move into the area and others feel more confident to buy a house when they have a stable income.
House Prices Increase
This indicator is usually one of the later to be seen. However, you will begin to see less negotiation between buyers and sellers; buyers are more willing to pay the sales price. Sellers are less likely to offer deals or reduce their price because they know someone else will be interested in the house at the selling price.
Seller Deals Disappear
Sellers do not feel the need to offer benefits to sell their home, such as paying closing costs or paying for points. Buyers take the time to get approved before looking for a home because they know they don’t have time to waste when they find the perfect home. If they have to get approved, they know they risk the likelihood that the house will be sold before they can put in a bid.
What Happens in a Seller’s Market?
When the momentum shifts to the seller, interest rates as well as prices go up. Buyers that wait too long to get into the market will find that they are paying more than they would have just a few short months ago. There will also be fewer houses to choose from and the ones that are on the market will be available for a shorter time.
The best time for a buyer to make a purchase is when the market has hit bottom and is just starting to move upward. They can still get attractive interest rates and find a good selection of homes to choose from. They will get a good price for the house before values start to go up. This will allow them to purchase at a reasonable price and as the value of the house increases, they will owe less than what their home is worth.
If buyers do not watch the housing market closely, they will find that they missed the ideal opportunity to become homeowners.