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The Florida Realtor’s Guide to navigate your client in different markets
Your Client Asks: “Is it a buyer’s market or seller’s market”?
As a real estate professional in Florida, clients frequently ask whether the current market favors buyers or sellers. One of the best ways to assess this is by analyzing the months of housing supply, which provides a clear picture of supply and demand dynamics. Understanding this metric allows you to deliver informed responses and adjust marketing strategies as market conditions shift.
How do you calculate months of Housing Supply (Inventory)
Months of housing supply refers to the number of months it would take to sell all active listings at the current sales pace, assuming no new properties enter the market. The calculation is: number of active homes in market this month divided by number of homes sold last month.
How to Determine Market Conditions
Seller’s Market (Less than 5 Months of Supply)
A seller’s market occurs when inventory is low and demand is high, typically resulting in rising prices, faster sales, and multiple offers. Signs include:
- Less than 5 months of inventory.
- Increasing home prices.
- Quick sales with competitive bidding.
- Limited seller concessions.
Buyer’s Market (More than 6 Months of Supply)
A buyer’s market emerges when housing supply exceeds demand, leading to longer selling times and more negotiating power for buyers. Indicators include:
- More than 6 months of inventory.
- Home prices stabilizing or declining.
- Extended days on market.
- Sellers offering concessions to attract buyers.
Neutral Market (5–6 Months of Supply)
A neutral market signifies a balance between buyers and sellers. Prices tend to remain steady, and properties sell at a moderate pace. Neither side has a significant advantage, making it an optimal time for well-priced, high-quality listings to move.
How to Approach a Cooling Market
If the market is shifting from a seller’s market to a neutral one, realtors should adapt their strategies to reflect the changing dynamics:
- Price Realistically: Homes priced too aggressively may sit on the market longer as buyer demand slows.
- Highlight Value: Focus marketing on the property’s unique features rather than relying on competitive bidding.
- Encourage Buyer Engagement: A cooling market means buyers have more room to negotiate, so adjusting selling strategies to emphasize incentives can help close deals.
- Stay Data-Driven: Use market reports and historical trends to advise clients on the best timing and approach for their real estate transactions.
Get Expert Guidance at Star Bay Realty
Navigating shifting markets can be complex, but with the right brokerage support, realtors can thrive in any condition. At Star Bay Realty, we offer 100% commission brokerage plans, expert guidance, and access to valuable market insights, ensuring our agents stay ahead of the curve. Understanding market trends and adapting accordingly will allow you to provide the best service to your clients and grow your real estate business successfully. www.starbayrealty.com.
Stay informed, stay proactive, and let Star Bay Realty help you maximize opportunities in every market cycle.