Ask around and almost every homebuyer out there wants to know if there’s a way to get a better deal. And just about every seller wants to know if they’ll still get top dollar.
The interesting thing is both can be right at the exact same time. It just depends on where you live.
Today’s housing market isn’t moving in one direction anymore. Some markets clearly favor buyers, while others still favor sellers. Most are sitting somewhere in the middle.
Knowing which market you’re actually in can completely change the strategy you use to buy or sell (and what expectations you should have). Let’s break it down.
One Number Tells You Who’s Got Leverage
How do you know which market you’re in? There’s one number that tells the story faster than anything else: the months’ supply of homes for sale. It’s the clearest signal of who’s got leverage and what strategy you’ll need.
Imagine no additional homes were listed starting today. Months’ supply tells us how long it would take to sell everything that’s currently on the market based on today’s demand.
Generally speaking, if months’ supply is:
- Fewer than 4 months: Sellers usually have the advantage.
- 4 to 6 months: Buyers and sellers are on more equal footing.
- More than 6 months: Buyers can usually negotiate for a better deal.
Right now, the National Association of Realtors (NAR) data says that number is 4.6 and that puts the overall market back in balanced territory (see graph below):
That means, as a whole, the market has finally moved back into a much more balanced range after years of being tilted in sellers’ favor. While that may look like the scales have tipped only slightly, it’s enough to make a real difference in what strategy you’ll need for your move – at least in most places.
The Tale of Two Markets: Why ‘Balanced’ Doesn’t Mean the Same Thing Everywhere
Redfin data helps shed some light on how this shakes out across the country. It breaks down which cities are leaning in either direction (see graph below).
- Some markets give buyers more leverage. Those are in blue.
- Some still favor sellers. That’s the orange.
- Others fall somewhere in between. Those are gray.
Notice anything? A lot more places are seeing more buyer-friendly conditions right now. In fact, this is the most buyer-friendly market we’ve seen in nearly 6 years. But don’t take that as buyers have the upper hand everywhere.
There are still cities where sellers still have the power. And if you’re in one of them, your approach to selling or buying looks completely different than it would in a buyer-leaning market.
The Biggest Mistake You Can Make Right Now
That’s why the biggest mistake is making any assumption without talking to an expert agent first.
Today’s market is incredibly local. In one market, a buyer may be getting thousands of dollars in concessions from a seller. And a homeowner may have to consider dropping their price. But in another, a buyer may be stressed about coming in with their best offer, or they may lose out on the home to another buyer. And a seller may still be seeing strong demand and prices inching higher.
What’s happening in your backyard affects everything from pricing your house to making an offer to negotiating repairs or concessions. That’s why an agent’s local knowledge matters more now than ever before. Your plan has to be based on your neighborhood and only an agent has the expertise to get that right.
If you’re wondering who has the upper hand where we live, let’s talk. I’ll show you exactly what the numbers look like in our market – and what strategy gives you the best shot at getting what you want.
Cover Photo by Randy Fath on Unsplash
