There are sellers who are not buyers and buyers who are not sellers. For example people getting their first home, selling a home they inherited, buying a home after getting divorced, or selling to move together with their loved ones, buying or selling a second home, buying in one area and selling in another, etc.
Buyer’s vs seller’s market is just a way of comparing the number of people attempting to buy a house against the number of houses up for sale. Both local and global factors impact this, for example a new factory opening in town, or increased tariffs on building supplies.
As for buyers also being sellers, that does have some impact, but maybe not as big an impact as you’d think. A seller may be building a new home instead of buying one, or a buyer might currently be renting. In either case somebody may be moving to a different region with a different balance of buyers vs sellers, because you’re only competing for houses in whatever area you consider a reasonable commute.
There are buyers and sellers who aren’t doing both sides of the transactions…
Much of the demand in the current market is from first time buyers — people who were renting apartments and decided they needed more space, finally had down payment money due to stimulus checks, relocated from high cost of living cities to ones they could afford to buy in, etc. so you had like 3-4 year of typical demand for starter homes as people moved up timelines and changed lifestyle.
At the same time, there were shortages of step-up homes for families who needed bigger homes for work from home, remote learning, etc. The shortage was because boomers were at the highest COVID risk, and thus didn’t want people touring their homes, they didn’t feel safe traveling to Florida or Arizona to look for their retirement home, they may have had adult kids move back home to ride out the pandemic. So the supply was tighter than typical for these homes.
And if there aren’t the step-up homes available to buy by sellers of starter homes, then that causes friction in the market.
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