Before making the decision to buy or sell a property, you should evaluate the kind of market you’re in. We can break down the housing market into two types: a buyer’s market and a seller’s market. Being able to tell whether it’s time to buy, sell, or hold can help you determine when the housing market is a safe investment.
What Is a Buyer’s Market?
It’s best for real estate investors to invest in property in a buyer’s market. A buyer’s market occurs when the housing supply exceeds the demand. Overall, property prices are low and tend to stay longer on the market. This makes it easier for investors to find quality properties at low prices, and investors compete with fewer buyers per property. This means investors have more leeway to compare prices and be a little choosier about where they put their money.
What Is a Seller’s Market?
A seller’s market is the opposite of a buyer’s market. The demand for housing exceeds the supply, and investors have a harder time finding cheap properties. With homes selling fast, there’s less time to compare prices, as other investors may snatch up a property quickly. Investors have less room to make negotiations in a seller’s market, and they’ll often have to accept properties as they are.
How To Determine the Current Market
A buyer’s market is the better one to invest in, so you might wonder how you can determine the current market. Fortunately, there’s a quick way to get a beat on the current market and determine whether it’s time to invest.
Take the current number of homes on the market and divide that number by how many houses have sold in the last month. The resulting number can tell you whether it’s a buyer’s or seller’s market. Generally, results above seven indicate a buyer’s market, as this would suggest a large inventory. Other solid indicators of a buyer’s market are if these homes have been on the market for an extended period and are selling below the asking prices.
Now that you know how to tell when the housing market is safe to invest in, you might wonder about the market in your area. If you’re looking to invest in property or need help managing your current properties, contact Excalibur Homes today. We’re a Tampa rental property management company with experienced and knowledgeable property managers who can help you find the right property for your budget or deal with the day-to-day responsibilities of being a landlord.