Buyer’s vs. Seller’s Market

The Columbia, Missouri real estate market has been a seller’s market for the past year, with home prices continuing to rise and limited inventory available to meet the high demand from buyers. However, as we move into 2024, there are signs that the market may be shifting towards a more balanced state, offering opportunities for both buyers and sellers.

What is a Seller’s Market?

A seller’s market is characterized by high demand from buyers and limited supply of homes for sale. In this type of market, sellers often receive multiple offers on their properties, sometimes above the asking price. Homes tend to sell quickly, and sellers have more leverage to negotiate favorable terms.

In Columbia, the median home sale price rose 6.1% year-over-year from January 2023 to January 2024, reaching $223,500. The number of homes sold also increased by 134 homes to 4,278 during the same period. This trend is expected to continue, with the median home sold price in Columbia Township reaching $300,017 in February 2024, up 5.4% from the previous year.

The limited inventory in a seller’s market can be attributed to several factors, including the lingering effects of the COVID-19 pandemic, which caused many homeowners to delay selling their properties. Additionally, the rise in remote work has led to increased demand for homes in desirable areas like Columbia, further exacerbating the supply shortage.

What is a Buyer’s Market?

In contrast, a buyer’s market is characterized by a surplus of homes for sale and lower demand from buyers. In this type of market, buyers have more negotiating power, and sellers may need to offer concessions or accept lower offers to sell their homes. Homes tend to stay on the market for longer periods.

While Columbia is currently in a seller’s market, there are signs that the market may be shifting towards a more balanced state. Realtors predict that the market will normalize in 2024, with inventory increasing and a more balanced supply-demand dynamic. However, it’s important to note that the market is unlikely to return to pre-pandemic levels, with prices expected to remain high and interest rates continuing to impact affordability.

In a buyer’s market, buyers have more time to make decisions and can be more selective in their choices. They may also be able to negotiate better terms, such as a lower price or more favorable closing conditions. However, buyers should still be prepared to act quickly when they find a home they love, as the market can shift rapidly.

Navigating the Market

Whether you’re a buyer or a seller in the Columbia real estate market, it’s crucial to work with an experienced real estate agent who can help you navigate the current market conditions. Buyers should be prepared to act quickly when they find a home they love, as competition remains high. Sellers should price their homes competitively and be open to negotiating with buyers.

For buyers, it’s important to get pre-approved for a mortgage and have a clear understanding of their budget and preferences. They should also be prepared to make offers quickly and be willing to compromise on certain features if necessary. Buyers should also be aware of the impact of interest rates on their purchasing power and factor this into their decision-making process.

Sellers, on the other hand, should work with their real estate agent to price their home competitively and make any necessary repairs or updates to make their property stand out. They should also be prepared to negotiate with buyers and be open to offers that may be slightly lower than their asking price. Sellers should also be aware of the potential for multiple offers and have a plan in place for handling them.

In conclusion, the Columbia real estate market is currently a seller’s market, with home prices continuing to rise and limited inventory available. However, as we move into 2024, there are signs that the market may be shifting towards a more balanced state, offering opportunities for both buyers and sellers. By working with a knowledgeable real estate agent and staying informed about market trends, buyers and sellers can make informed decisions and achieve their real estate goals in Columbia, Missouri.