Whether you are a new home buyer or a seasoned investor, you may have heard the term “buyer’s market”. This term is used to refer to a real estate market in which there are more units for sale than buyers. Home buyers can see big advantages in this type of market!
A buyer’s market involves a higher supply of housing units in comparison to the number of buyers at a given time. As such, the buyer will have a larger variety of units to consider for purchase in such a market. More choices are always positive.
Since the real estate market abides by the same laws of demand as other markets, a higher level of supply compared to demand means that prices will drop. Therefore home buyers will see lower asking prices in this type of market and may be able to negotiate even lower sales prices.
Since sellers know buyers have many options, they are usually more willing to concede to buyer’s terms such as close times, paying some of the buyer’s closing costs, and even leaving chattels such as appliances or furniture
Time to Decide
Since there are fewer buyers competing for the same units, a buyer can take their time when considering available options. This may allow time for repeat visits as well as inspections, financing, etc.
Real estate markets go in cycles so it will sometimes be a buyer’s market and other times it will be a seller’s market. When it is a buyer’s market, homebuyers should understand that they have the upper hand in the market!