Buying or selling a home can be a lot like playing a game of cards: You gotta know when to hold’em and when to fold’em. To determine the best moments to buy and sell, most people look to the Real Estate market — whether it’s a buyer’s market or a seller’s market.
But what is a buyer’s market? And to what degree should you plan to buy or sell based on the type of market you’re in? We gathered a team of Real Estate pros to break it all down.
What’s a Buyer’s Market?
As you might have guessed, a buyer’s market favors buyers, not sellers. But what does that mean?
It means external conditions — like supply and demand, comparable sales in the neighborhood, the economy, public opinion, confidence in the future, and changes in the tax laws — favor buyers.
These factors create an ideal scenario for buyers in the Real Estate market. First, we go through a period of approximately six months, or longer, where prices start to steadily soften as time goes by, coupled with rising inventory and interest rates dropping. When this happens, buyers have a lot more houses to choose from.
What Does It Mean for Buyers?
In a buyer’s market, buyers are more likely to get a sweet deal on a purchase. If you are in the market for a new home, it’s an ideal time to make your move. Why? You may be able to use the excess inventory to your advantage and secure your dream home for a lower price.
Plus, since the market is less competitive, you are more likely to have a longer period to decide which house you want instead of getting caught up in a bidding war. With such little competition, buyers can negotiate with sellers to include things like a new home warranty or even cover part of the closing costs.
What About for Sellers?
As you have probably guessed a buyer’s market is not a particularly good time for sellers. This is simply due to the fact that there are so many other sellers competing for the same group of buyers. Sellers may find their property sitting on the market for much longer.
In a buyer’s market, it’s more important than ever to make sure your home is move-in ready and shows well in photos. Also, if the home has a unique or uncommon feature (a larger backyard, secret room, extra storage) be sure to highlight that to stand out from the crowd.