The term “Buyers Market” is used to describe the market when conditions are more favorable for home buyers. Conversely, “Seller’s Market” describes conditions that are more favorable for home sellers.
There are no mathematical formulas or hard and fast rules when it comes to determining what makes it a buyer’s or seller’s market. A buyer’s market can be anything from the drastic price reductions we have seen in some parts of the United States, to the faintest slant in the buyer’s favor, more like we are seeing locally: pricing has slightly deviated, the number of sales have decreased and the time on market has increased.
Logically, every home buyer wants to purchase their home in a buyer’s market – but ironically, it’s emotionally harder to do so. When prices are waning and there are so many homes available to choose from, it’s hard for buyers to have the courage to step out and commit. Some wait to see if market prices will come down further or simply become overwhelmed by all the choices.
It’s much easier as a home buyer to get caught up in the excitement of a seller’s market when new home presentation centers are lined up around the block, homes are selling with multiple competing offers, and bidding wars are common. In a seller’s market it seems like everyone is investing in real estate and “sold” signs are everywhere; it just feels counterintuitive to buy when the market is “slow”.
It’s natural to worry about the market falling or that you didn’t negotiate enough to get the very best price, but a buyer’s market really is the most ideal time to buy a home. The key to having the confidence to buy in a buyer’s market is thinking long term. The market typically moves in 5 to 10 year cycles so consider where you plan to be in the future to avoid having to sell your home in a buyer’s market! Evaluate your budget carefully so if prices ease off or remain temperate you don’t have to worry about selling quickly.
The most important thing to remember about a buyer’s market is it gives you as the home buyer the time to think everything through and to truly analyze your needs to make an informed decision – and maybe even find that unbelievably great real estate deal every home buyer dreams of!