Real estate has been slow over the last year or two, and the current market could be described as a buyer’s market. With consumer confidence improving, however, it won’t be that way for long!
If you’re looking at buying a home, it pays to be attentive to the current market conditions – so here’s an overview of what a buyer’s market and seller’s market are, and how they’ll impact your search for a great property.
What is a buyer’s market?
A buyer’s market is how we describe a time when there are many more properties for sale than there are active buyers. Lots of sellers are trying to sell, and they don’t have many people to sell to – so as a buyer, you’re at an advantage.
A buyer’s market is great for a buyer, because:
- There’s typically lots of choice across all sectors of the market,
- Home open traffic is slow, so you won’t have to compete for the agent’s attention,
- You’ll probably have plenty of time to make a decision, and
- Competing against other offers is rare.
The key to doing well in a buyer’s market is to take your time. You have the opportunity to negotiate a good price, so don’t be rushed into making a decision before you’re ready
What is a seller’s market?
A seller’s market, on the other hand, is more difficult for a buyer. There’s few properties to choose from, and plenty of people looking to buy – so the seller is at an advantage.
Those properties that do suit, are well-presented and are priced reasonably often attract multiple offers (many of which are over the asking price!)
When this happens, it can be tempting to wait and ride the market out. The hope is that demand will settle down and prices will eventually fall. This rarely happens – but it occasionally has in the past, especially between 2007-2011 where property values fell. In some cases the falls were quite significant.
In most cases though, demand eventually slows temporarily and then settles into long term patterns that produce moderate property price growth.
To try to wait out a sellers’ market in the hope of a fall in property prices is risky – if the market keeps moving a first time buyer can find themselves priced out of the market.
So buying your ideal home in a sellers’ market is all about being prepared and acting fast. Get pre-approval, know exactly what you want – and when the right property comes up, act!
Whether you’re buying in a seller’s market or a buyer’s market, research the market and keep current market conditions in mind when looking at properties. It’s a smart move!
Image by Casey Serin via Flickr.