Let’s talk about the differences between a seller’s market and a buyer’s market. While inventory might not be top of mind when you’re buying or selling a home, you need to know what’s happening in our local market if you want to get the best price.
A seller’s market exists when people who want to sell their homes have more negotiating power than prospective buyers. This usually happens when there are fewer homes for sale than there are buyers. Much of the country is in a seller’s market because of the nationwide housing shortage. As a result, the median home price has hit an all-time high.
According to the Lafayette Board of Realtors, we have 150 residential properties for sale and an absorption rate of 1.8 months of inventory. The absorption rate is how fast homes are sold in a specific market. To get it, you simply divide the number of homes sold by the number of homes available. A high absorption rate means that there is a lot of demand and that homes don’t stay on the market for long.
As a general rule, five to six months of inventory is considered to be a balanced market. Over six months is a buyer’s market, and less than five months is a seller’s market. The less inventory available, the tighter the market.
Keep in mind that these are just guidelines; they may differ from market to market. If you have any questions about buying, selling, building, or investing in the Greater Lafayette area, please call or email me.