In a slow real estate market, sellers are desperately looking for ways to sell faster and for more money. They need home staging services now more than ever before and it comes down to the simple economic laws of supply and demand.
Here’s how it works:
When demand exceeds supply, prices rise
This is what we saw in most real estate markets for approximately the last 10 years.
Fueled by easy credit, low interest rates, high real estate appreciation, and the general feeling of wealth and abundance that came from a rising stock market, there were lots of buyers chasing a dwindling number of homes.
Because demand was higher than supply, homebuyers felt pressured to make quick decisions, and bidding wars were common. This drove up prices even more.
Home sellers held the power in this situation, thus the term “seller’s market.”
TV shows and articles about house flipping and home staging became popular and increased the general awareness of the difference staging can make. Despite being in a hot real estate market, the home staging industry grew as savvy sellers and property investors looked for ways to make even more money when they sold.
When supply exceeds demand, prices fall
This is what is happening in today’s real estate market.
People who got in over their heads with easy credit have been forced to sell or put their homes in foreclosure. As banks absorb their losses, credit becomes tighter. Homebuyers with good credit ratings, who normally wouldn’t have any problem getting approved for a bigger mortgage, are having a harder time getting loans, which further reduces demand.
That’s why government plans are aimed at freeing up credit again!
A slow real estate market is called a “buyer’s market” because there are lots of homes for sale and fewer buyers fighting for them. The perceived pressure to make a quick buying decision is gone.
On Friday, I’ll post a follow up article to this piece which explains how home staging can put the power back in the hands of the seller.
But you don’t have to wait for me to go into further detail! Please share your own ideas and comments below to continue this discussion.
Also, if you haven’t already, get your copy of the free report that home stagers everywhere are talking about; “Ask Staging Diva: Can I grow a home staging business in a depressed economy?” to learn more about the law of supply and demand and its affect on our industry.
Debra Gould, The Staging Diva®
President, Six Elements Inc. Home Staging
Debra Gould developed the Staging Diva Training Program to create opportunities for others to grow their own profitable home staging businesses. There are currently over 1000 Staging Diva Graduates around the world. Debra encourages anyone concerned about starting or growing a home staging business in today’s economy to download her free special report: “Ask Staging Diva: Can I grow a home staging business in a depressed economy?”
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{ 4 comments… read them below or add one }
Supply and demand discussed here is a reference to supply and demand for homes.
There is not an over-supply of home stagers, especially when you compare it to the quantity of real estate agents in any given market. The fact that home staging is getting so much publicity is a great thing for the industry because it means the number of home sellers who have heard of staging is growing. This makes the marketing challenge of building awareness somewhat less arduous.
With SO many homes going on the market this spring real estate market, now is the time to make sure you can be found by potential clients and that you’re projecting the right image in your market.
Competition is not a bad thing, it keeps you on your toes and makes you sharpen your game. It especially means you need to do effective marketing to make yourself stand out from others. If you need more assistance in this regard, make sure you listen to course 4 of the Staging Diva Training Program, called Staging Diva Sales & Marketing Secrets to Boost your Home Staging Business, available at http://www.stagingdiva.com/store. You should also check out the Staging Diva Sales Script so you know the right things to say to a potential client.
Debra—Really good article. Looking forward to follow-up.
Great article Debra, must read tomorrow’s piece as well!
I find that the “supply” of home stagers is overwhelming. Maybe you think the demand for staging is high, but with the influx of stagers, the jobs have dwindled. Everyone thinks they can stage – so many home staging programs on HGTV and others has getting these staging jobs close to impossible. This is what I think “supply and demand” means.