Todd A. Smith, Senior Associate Broker
Referred to as Buyers or Sellers markets, the Bear and Bull markets differ from other markets in that the volume of homes sold is impacted more than the prices of homes sold.
The reason for this difference is that people have more control over raising or lowering the asking price of their home, regardless of current market conditions. This is unlike the stock market, where sellers have little to no control.
Thus, the method for analyzing home markets is to assess the home’s position in the market cycle and to carefully watch market indicators such as active, sold and pending activity to determine the optimal marketing strategy required.
English traders used the term "bull market", based on a sport, "bull and bear baiting", popular during the 18th century. Dogs were brought into town to fight a restrained bull. During this battle, bulls would scoop up the dog by bringing their heads up in a bullish, offensive move.
The "bear market" term also goes back to this time. Bearskins were highly desired, and in order for traders to meet the high demand, they would promise to deliver and collect money for the promised bear skins before possessing them.
The terms were then used on London’s stock exchange where bearskins were traded, not to obtain them, but to drive the price down before they had to deliver. If successful, traders would buy back bearskins before they had to deliver them at the lower price, thus making a profit!
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