You hear it on the news all the time: ”It’s a buyer’s
market,” “It’s a seller’s market,” or “The housing market is on the
rebound.” And while you probably get the gist of what these folks are
talking about, having a deeper understanding of the Lake Mathews housing market
and how it works can help you immensely during the home-buying or
selling process.

Let’s start with the basics

The housing market refers to the general market of houses being
bought and sold between buyers and sellers. These houses are either
bought or sold directly by owners or indirectly through brokers. Like
any market, the housing market is governed by the law of supply and
demand. When demand is high and supply is low, the market appreciates.
When demand is low and supply is high, the market depreciates.

How inventory affects value

In the real estate industry, we think of supply and demand in terms
of available inventory. You can measure inventory by answering the
following question: At the current pace of sales, how long would it take
all of the houses available on the market to be sold? As inventories
rise, home prices tend to decline. This is because as inventories rise,
so does the competition amongst sellers, which drives prices down.

The difference between a buyer’s and seller’s market

A buyer’s market in Riverside County is associated with longer inventory
periods. As homes sit on the market for longer and longer, sellers
become more and more flexible with their prices. This is great for
buyers, as they usually end up getting a good deal (hence the term
“buyer’s market”). In contrast, a seller’s market is associated with
shorter inventory periods. Homes sell rapidly, giving sellers a lot of
pricing power (hence, it’s a “seller’s market”).

Keep in mind that, as with other markets, the Riverside County housing market
is cyclical: There are periods of rapid appreciation followed by periods
of stabilization or depreciation. By studying the market, you can learn
to foresee such trends in Lake Mathews.

View more Riverside County real estate tips and reach out to your local realty specialist for advice tailored to your specific needs.