We hear phrases like "The real estate market is hot! It's a seller's market" or "It sure is a buyer's market right now, so you better hurry and buy a house soon." What do these phrases really mean, though? Which one means the real estate market is doing well? And more importantly, which one are we in right now? Let's answer all of those questions right now!

What is a Buyer's Market?

A buyer's market occurs when supply exceeds demand. In a buyer's market, real estate prices decrease and homes sit with "For Sale" signs in the front yard longer. Because of this, sellers must compete with each other in order to attract buyers. Most often, people trying to sell their home and move will drop their asking prices to gain an advantage in the market.

The past year was tough on all of us for many reasons. This includes people who wanted to buy homes for sale in Wake Forest. Thankfully, real estate experts tell us that it won't be this way much longer. Buyers may finally have a better selection of homes to choose from later in the year but will face a renewed challenge of affordability as prices stay high and mortgage rates rise.

What is a Seller's Market?

A seller's market happens when demand exceeds supply. There are people who want to buy, but the real estate inventory is low. In this situation, homes sell quickly and for a big profit. Buyers must compete with each other in order to score a property.

Is it Better to be a Buyer's or Seller's Market?

It depends whether you are buying or selling! Most economists feel a seller's market is "better" as a whole because it means people have money and are moving freely. This typically means the economy is doing well. A buyer's market is often the result of a recession and people tightening their belt, unwilling or unable to drop several thousand dollars on a downpayment.

What's the Market Like Right Now?

It's not the same across the entire country. Take a look at some properties in the area that are comparable to the one you're hoping to buy or sell. If they sold above asking price, it's likely your community is in a seller's market. If the price ended up below what the seller initially asked for, it's a buyer's market.

Many real estate listings websites and realtors themselves predict that the year 2021 will be a robust seller's market. They say home prices will hit new highs. At the same time, buyer competition remains strong. Inventory is expected to make a slow but steady comeback, which will give buyers some relief. However, increasing mortgage rates and prices will make affordability a challenge throughout the year.

As you look for homes for sale in Wake Forest, all of this is important to keep in mind. You may decide you don't want to deal with a bidding war and greedy seller and instead purchase new construction. This means new homes for sale in Wake Forest that have never been lived in before and you purchase directly from the developer or community, not a past owner.

The good news is that the 2021 housing market will be much more ‘normal’ than the wild swings we saw in 2020.