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  • Writer's pictureAndres Montalvo

What is a Seller's Market?

In the world of Real Estate, two possible scenarios define the market. A Buyer’s Market and Seller’s Market. Currently, in Houston, we are experiencing a competitive Seller’s Market.

A Seller’s Market is a term in the world of real estate used to describe the status of the real estate market. It signifies that houses are selling quickly, therefore benefiting the seller’s over the buyers in a negotiation. Usually, a Seller’s Market is known to happen when the months of inventory (a measurement of how fast houses are selling) in the market is between 0-4. Months of Inventory is found by dividing the number of homes currently available by the number of homes sold in the previous month. As long as houses keep selling faster than they are listed, the market will remain in a Seller’s Market and continue to be a competitive

marketplace for buyers.

Why are we in a Seller’s Market?

Houston began to move towards the Seller’s Market side of the spectrum back in July. Market activity was already high during the months before the city shut down due to COVID. So, when the shutdown was over, buyers began to take advantage. Also, interest rates continued to drop, therefore bringing more buyers into the market causing houses to sell at incredible rates. Market activity was going so fast for the past few months that now we have a low housing inventory in Houston.

What does this mean?

The major question people ask is, “Okay, what does this mean for me?”. Essentially, when we are in a Seller’s market, the market tends to benefit the seller due to the leverage they hold over buyers because of the low inventory available. Such conditions keep real estate prices high and the negotiability of homes low. However, a buyer could find themselves a very motivated seller who is willing to get rid of the house as fast as possible rather than hold for a couple of weeks to get a better price.

Overall, the market has been the opposite of what people thought it would be when COVID first came around. It has been more active than ever, and homes keep flying in and out! If interest rates continue to remain low, buyers will continue to come into the playing field. As long as this last, we will stay in a competitive Seller’s Market.

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