What is a Buyer's Market?
Here today, gone tomorrow! Never is this more true than when describing the real estate market! That’s why it’s so important to know your market. Maybe you’ve heard the phrase “buyer’s market”. But what does this mean anyways? And how can you tell? Well, don’t worry, we’ve got answers for you.
Quite simply, a “buyer’s market” is when the supply (available homes for sale) exceeds the demand (number of buyers seeking to purchase homes). Or in other words, there are more homes on the market than there are people buying homes. To determine a buyer’s market, we have to look at an area’s absorption rate. And a buyer’s market is any time the absorption rate is over 5 months. Check out video on absorption rate here.
Some other features of a buyer’s market may include:
- More properties on the market than in past periods
- Listed properties spending a longer amount of time on the market
- Current listing prices below previous sales prices
- A lower overall closing percentage
- Falling average house prices
The buyer’s market is especially good for first-time home buyers or real estate investors because it can give you the opportunity to buy your dream property at a lower price. But keep your expectations realistic. Just because you’re buying in a buyer’s market, doesn’t necessarily mean that you’ll be getting a fabulous house for rock-bottom price. In order for you to take full advantage of the buyer’s market, you’ll still need a professional real estate consultant who is a powerful negotiator on your side to get you the best deal.
It’s also important to note that each price range has it’s own market. This means there are multiple markets going on at one time. For example, there are probably more people looking for 300K-400K homes than there are people looking for 1M homes. It could be a buyer’s market for people in the 1M home range, while it’s a seller’s market in the 300k-400k range.
Bottom line, whether you’re looking to buy or sell, you should be aware of the current market conditions. And that’s where we come in. We make it our business to know the latest market reports and give our clients the most up to date information. In fact, we address it every month on our youtube channel, don’t forget to subscribe! Or give drop us an email at firstname.lastname@example.org, we’ll set up an appointment with you to develop your best plan of action.