Generally, there are two phases for the real estate market: a buyer’s market and a seller’s market. It’s always important to know which type of market the industry is currently in. Glenn Phillips, CEO of Beach Homes Realty, discusses whether beach real estate is in a buyer’s or seller’s market.
- Seller’s Market: Command Higher Prices. A seller’s market typically occurs when the market has limited inventory and a lot of demand. This allows sellers to seek higher prices for their properties, and in turn, buyers are forced to pay more.
- Buyer’s Market: More Options. In a buyer’s market, there are plenty of homes for sale but fewer buyers. Sellers cannot charge as much because buyers will move on to the next house. This causes sellers to decrease their prices in an attempt to get rid of their house.
- Pricing: Supply and Demand. These different types of markets affect pricing. During a seller’s market, prices increase, while prices drop in buyer’s markets. This is explained through supply-and-demand economics.
- Increase in Inventory (sort of). Recently, beach real estate has seen a slight increase in inventory. However, this may not indicate the signs of a buyer’s market quite yet. This is because much of the inventory is “phantom” inventory.
- “Phantom” Inventory. Appropriately priced beach homes sell quickly and don’t stick in inventory. However, some sellers think they can still get the same price they would have during COVID. These overpriced listings don’t go anywhere. This is called “phantom” inventory. So, while inventory has increased, it isn’t moving. This has led to a stalemate in the market.
- “Stalemate” Market. Buyers have strong demand, but the high prices are holding. There aren’t enough transactions and we’re limited by inventory. This means that neither the buyer nor the seller have an upper hand right now.
Whether we are in a buyer’s or seller’s market depends on the market you’re in. It varies from state to state and even beach to beach. Visit beach-homes.com to connect with expert beach agents who can explain the current market of your beach.