So what exactly is a buyer’s market? A Buyer’s Market is when we have more homes for sale than buyers. In this market buyers can leverage the over-supply of homes to their advantage and get very favorable terms such as lower prices, receive closing costs and can take their time with selection. Buyer’s markets are often identified with a depressed market or declining market and the obvious signs are very few offers in a buyer’s market – best offer is the only offer you received and it’s really low.
So what exactly is seller’s market? A Seller’s Market is when we have fewer homes for sale than buyers. In this market sellers can leverage the under-supply of homes to their advantage and get very favorable terms such as higher prices, pay little to no closing costs for the buyers and get quick turnarounds. Seller’s markets are often identified with a real estate market that is improving and/or getting hot, with multiple offers in a seller’s market – pick the best of many offers received and often they are over the asking price as buyers are competing.
Another way we track whether we are in a buyer’s or seller’s market is our current monthly supply of inventory. This market statistic demonstrates how many months of supply would be left if no other seller placed his house on the market. The breakdown would be the following:
1 to 5 months = seller’s market – price is appreciating
5 to 8 months = balanced or normal market – price is stable
8 months and more = buyer’s market – price is depreciating
So how are we doing in North and South Carolina? Reviewing the last 12 months ending October, 2013 for single-family homes and condo/townhomes for a few areas in NC and SC:
- Charlotte, NC = 5.5 months with our best month in 2013 of 4.4 months
- Triad Region, NC (Asheboro, Burlington, Greensboro, High Point, and Winston-Salem) = 9.5 months with our best month in 2013 of 6.3 months
- Triangle Region, NC (Raleigh area) = 4.8 months with best month in 2013 of 3.8 months
- Greenville, SC = 6.7 months with our best month in 2013 of 5.6 months
- Piedmont Regional SC (York, Lancaster County, Lake Wylie) = 6.9 months with our best month in 2013 of 5.4 months
As you can see from these numbers across the Carolinas, our trending for the last 12 months demonstrates we are moving out of a buyer’s market and into a healthy/balanced market, which means a great equilibrium for both sides of the transaction. The monthly supply inventory numbers of 2009 thru 2012 were often double-digit numbers of 10 months and more indicating a strong buyer’s market for many years, with falling prices. Now with these monthly supply inventory numbers decreasing into single-digit numbers, we are starting to see price appreciation in all of our markets. A few of our markets are even starting to evolve into a seller’s market!
So what does all of this mean to you? It means the NC and SC residential real estate market in 2013 showed solid improvement throughout the year and continues to build strength. If you are thinking of buying a home, low interest rates and good pricing results in high affordability. If you are thinking of selling your house, the improving market means more activity and better chances of market-value returns for your equity investment. The Allen Tate Company is here to help you guide you each step of the way so let us know how we can be of service!
By Tony Jarrett (Regional Vice President, Triad)