What is a Balanced Real Estate Market?

In the ever-changing world of real estate, one crucial factor that affects the market is the balance between supply and demand, among a myriad of other factors. When the number of homes available for sale is roughly equal to the number of buyers in the market, it is referred to as a balanced market. A balanced market provides stability and predictability, making it an ideal situation for both buyers and sellers. In this article, M&D Real Estate will explain what a balanced real estate market is, what type of market we are in today in Dallas-Fort Worth, and how to navigate it effectively.

In Dallas-Fort Worth right now, Dallas County is still a firm Seller’s Market with two months of inventory, Kaufman County and Hunt County are entering into balanced markets with about four months of inventory each, and Rockwall County has 3 months of inventory and so is still technically considered a seller’s market.

But, keep in mind, experts are predicting an influx of as much as a 30% increase in home inventory in 2024. This expected increase in inventory could push all areas into a balanced market in the next several months.

Understanding a Balanced Real Estate Market

Let’s rewind a little bit to explain what a balanced market is exactly and how it works before we go into more specifics about how to navigate this type of market we find ourselves entering.

In a balanced real estate market, the delicate balance between the supply of homes and the demand from buyers results in an environment where neither party holds a significant advantage.

A balanced market is typically defined as a market with four to six months of available inventory. Three months or less available inventory of homes for sale is considered a seller’s market, and then over six months available inventory is getting in to buyer’s market territory.

Also, prices in a balanced market exhibit a steady trajectory, preventing drastic fluctuations that could impact the overall stability. Another significant characteristic is the duration that properties stay on the market, reflecting the pace at which transactions occur.

The Impact of a Balanced Market on Real Estate

A balanced real estate market has several significant effects on the industry. Let’s take a closer look:

  1. Balanced Supply and Demand: The hallmark of a balanced market is the equilibrium between available homes and potential buyers. This delicate balance fosters stable prices and the emergence of predictable market trends.
  2. Favorable for Buyers and Sellers: Considered advantageous for both parties, a balanced market offers a win-win scenario. Buyers enjoy a broader array of property choices, while sellers can reasonably anticipate fair prices for their homes.
  3. Longer Time on the Market: Unlike the swift transactions characteristic of a seller’s market, homes in a balanced market tend to linger on the market for an extended duration. Sellers may find it necessary to exercise patience and flexibility in their pricing strategies to attract prospective buyers effectively.

During COVIDera, homes were flying off the market within two days of going live. The average days on market was about 29.5 on average. This valley in days on market occurred in August of 2021. Compared to today’s market, where number of days homes spend on the market is now about 66 days on market, so over twice the days on market we saw in 2021 when we were firmly in a seller’s market. This is another indicators that we are moving towards a more balanced market.

4. Less Competition: A notable characteristic of a balanced market is the reduced competition among buyers. This alleviates some of the typical stress associated with the buying process, creating a more manageable and less pressured environment for potential homebuyers.

Navigating a Balanced Market as a Buyer

A balanced real estate market has several significant effects on the industry. Let’s take a closer look:

  1. Be Patient: In a balanced market, the average time a home spends on the market tends to be longer compared to a seller’s market, which can be helpful – as we just noted above, a home currently sits at around 66 days on market on average in Dallas-Fort Worth… Utilize this extended timeframe to meticulously assess your options, ensuring you make a well-informed decision that aligns with your preferences and needs.
  2. Be Flexible: Given that sellers may not face the same urgency to close deals swiftly in a balanced market, flexibility in your pricing strategy is crucial. Be open to negotiations and adaptable in your approach to secure a favorable deal.
  3. Work with a Professional: Engaging the services of a seasoned real estate agent is a valuable asset when navigating a balanced market. A knowledgeable agent can assist you in identifying the most suitable properties, negotiating terms that align with your interests, and guiding you seamlessly through the entire buying process. Their expertise becomes particularly crucial in deciphering market trends and making informed decisions in the face of equilibrium between supply and demand and knowing when the seller is making a fair offer at a fair price with fair terms.

Navigating a Balanced Market as a Seller

For sellers in a balanced real estate market, here are some essential tips to consider:

  1. Be Realistic: Understand that demanding an inflated price for your property may not be feasible in a balanced market. Setting realistic expectations and being open to negotiations can attract potential buyers and facilitate a smoother selling process.

2. Stage Your Home: Invest in professional home staging to enhance your property’s appeal. A skilled staging expert can effectively showcase your home’s best features, creating an inviting atmosphere that resonates with potential buyers. You can also consider just virtual staging if the house is empty. This is a service M&D offers sellers free of charge. This strategic presentation can significantly impact their perception and decision-making, especially when buyers now have multiple options with more inventory available.

3. Work with a Professional: Collaborate with a reputable real estate agent experienced in navigating balanced markets. A skilled agent will assist you in determining a fair and competitive price for your property, developing an effective marketing strategy, and attracting qualified buyers to get you top dollar for your home. Their expertise becomes invaluable in ensuring a seamless and successful selling experience in a market where equilibrium between supply and demand prevails and buyers are beginning to demand more concessions with stronger negotiation asks than they would have had in a seller’s market.

Navigating the Market with M&D Real Estate

Again, a balanced real estate market is characterized by equilibrium between the supply of homes and the demand from buyers – and typically occurs once inventory levels hit over the four-month mark in a given geographic area.

This state of balance provides stability and predictability, benefiting both buyers and sellers – but when the market changes, you will have to understand better how to navigate the new-new. We have been in seller’s market territory for quite some time in Dallas-Fort Worth.

So, higher number of days on market, price reductions, buyers asking for more concessions, and the like are just beginning and may only increase with the predicted influx of inventory in 2024.

Having a really good agent who is highly skilled in negotiation will make all the difference when you get ready to sell or purchase a new home.  

Remember, a balanced market is just one of the many phases the real estate market can go through. Keep an eye on market trends and consult with experts to adapt your strategies accordingly. By staying informed and proactive, you can make the most of any market conditions and achieve your real estate objectives.

So, we hope you will let us at M&D Real Estate help you with your journey through the nuances of a balanced real estate landscape!

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