If you’ve been in the market to buy or sell a home in recent months, chances are you’ve heard that it’s currently a ‘seller’s market.’ As a seller, you may be excited about this but as a buyer you may be feeling discouraged, since in this market climate sellers tend to have the upper hand.
With that being said, it’s certainly not impossible to purchase a home in a seller’s market. And, if you’re interested in building a custom home, now may be an especially good time to do so.
What is a Seller’s Market?
A seller’s market is a housing market where there are more home buyers shopping for homes than there are sellers selling their homes. This means competition is increased among buyers because of a reduced supply of homes for sale and high demand for those that are available.
Tight inventory of homes and increased competition among buyers results in higher sale prices, which can make buying a home seem out of reach – especially for buyers with limited budgets.
Why is Buying a Home Harder in a Seller’s Market?
Buying a home can be more difficult in a seller’s market for a number of reasons. A few of those reasons include:
1. There Are Fewer Houses Available to Buy
In a seller’s market, there tend to be fewer houses on the market. This means you’ll have less selection when it comes to the features you’re looking for, which may make it more difficult to find a house you’re interested in purchasing.
2. The Ratio of Buyers to Sellers Favors Sellers
Increased competition among buyers can make it more difficult to finalize a sale on a home, especially if other buyers are willing to pay more, pay cash, be more flexible, etc. Sellers will have their pick of who they’d like to sell to, putting them at an advantage and making things a bit more complicated for buyers.
3. Home Prices are Higher
The fact that the ratio of buyers to sellers favors sellers tends to drive home prices up. With increased competition for the homes on the market, sellers are able to increase their asking prices, so be prepared to pay a bit more for a home.
4. Homes Sell Faster
Homes will show up on the market and be gone in a matter of days. With increased competition among buyers, they get snatched up in no time so plan to act quickly if you find a place you love.
What Are Some Tips for Successfully Purchasing a Home in a Seller’s Market?
While there are some added challenges for buyers shopping for a home in a seller’s market, don’t despair! There are a few strategies you can utilize to work towards a successful home purchase.
1. Be Prepared
This is one of the best things you can do as a home buyer in any market, but it’s especially important in a seller’s market. Being ready to move forward quickly can make you an appealing buyer. Be sure you are pre-qualified for your mortgage, and be ready to make an offer if a house you are interested comes on the market.
2. Be Flexible
Flexibility is another characteristic that sellers value in buyers. If you’re willing to accept certain contingencies, move forward with a sale without repairs being made, etc. you may come out on top in the competition among buyers. Being flexible also means considering home types or locations you may have otherwise ruled out given how competitive the current market is.
3. Offer Higher
If you make a low-ball offer on a home in a seller’s market, chances are you’re not going to get the home as other buyers will likely make more appealing offers. With this in mind, plan to make a higher offer on a home you’re interested right off the bat. Don’t stretch beyond a budget you’re comfortable with, but know that you’ll have to make a competitive offer to start out if you want to be in the running.
4. Consider Building a Custom Home
Many people don’t realize that a seller’s market is actually a terrific time to invest in a custom home. In many cases, building is actually better than buying during a seller’s market! If you are currently a homeowner, you can sell your current home for top dollar and build custom. If you’re renting and ready to move into a home, you can avoid the pricey housing market and instead build a home with all the custom features you’ve dreamed of, likely for a better price!
5. Think a Custom Home May Be The Way To Go?
Whether you’re just starting your home search or you’ve been struggling with the challenges of a seller’s market for a while, now may be a good time to consider building a custom home.
Interested in building a custom home in the Capital Region?
We can help! Our team has been building high quality custom homes throughout Saratoga and Clifton Park for years.
Ready to take the first step towards a custom home of your own? Avoid the hassle of a seller’s market and contact us today! Give us a call at 518-348-0931 or contact us online to get the conversation started.