It is generally considered a seller’s market when the conditions favor the seller. This condition exists when demand is high and supply is low without any significant adverse economic conditions taking place.
Demand is determined by ready, willing and able buyers. Low interest rates with indications that they will begin to rise fuels part of this demand. Rising prices also creates a sense of urgency to avoid higher housing costs.
Inventory is currently below what is considered balanced in most areas. In some areas and price ranges, homes are selling very quickly, with multiple offers and sometimes at above the listing price. When too many buyers are chasing too few properties, things get competitive and the seller is the beneficiary.
Even when buyers and sellers come to an agreement on price and terms, a challenge can occur if the appraisal doesn’t meet the sales price. Either the purchaser has to come up with the additional cash or the purchase price has to be renegotiated.
A typical seller wants the most money possible for their home in the shortest time frame with the fewest inconveniences. A Seller’s Market provides the most likely environment for this to happen.