Real Estate Market Two Ways
Every home search is not created equally. Each search will involve at least two of the three known players in real estate. They are the seller, the lender, and the buyer. Their levels of involvement focus on clear ownership and achievement of their best price. These individuals or entities are only limited by their amount of leverage in the sale. This is further clarified by the two states of the real estate market. On one hand, leverage can be in the seller’s hands during a period classified as a seller’s market. The sellers are able to, within range of other competitive homes, set their home’s value according to its size (lot and usable square feet), how much they paid for it, and how much they’ve invested in it.
On the other hand, leverage can be in the buyer’s hands during a period classified as a buyer’s market. This is when buyers inadvertently drive down prices when they are focusing on lower priced homes and letting expensive homes sit on the market until sellers have to readjust their asking price. Sellers know that the longer a house is on the market, the less attractive it is to buyers and the less attention it will receive. So sellers typically like it when they are in control of the negotiations in real estate. But, buyers have their turn at the wheel in the housing market. That is to say, when the economy is in recovery, as it is today, the value of homes have plummeted in some areas so homeowners can no longer justify high asking prices. Property value plummets collectively in the housing marking. And buyers are getting into their dream homes at rock bottom prices these days.
The real estate market, however, remains competitive because of the diversity in the effects of the current economy, amongst other factors. There are some individuals and families who have sustained their incomes, their credit, and their investments. As sellers, they can wait for the market to improve in their favor before selling a home. As buyers, they can take their time searching for their ideal lot size, landscape, and home layout. They can do this because they have the down payment and credit availability to make the purchase of their intentions and not of the state of the market. That is the nature of real estate, respective to but during any state of the economy.