When to Make Your Move: a Buyer’s vs. Seller’s Market
A little lingo can go a long way. For instance, you’ve probably heard the terms “buyer’s market” and “seller’s market” — you may even have found yourself using them in conversation. But do you really know what they mean? Understanding how supply and demand affects market value will be useful as you hunt for your next home or sell your property.
In recent years, the Lower Mainland’s housing market has been characterized by conditions largely favourable to sellers: a limited supply of available homes paired with high buyer demand. Having said this, the existence of a “seller’s market” doesn’t mean that homes will be overpriced or unaffordable for first-time buyers. Many buyers have had success finding the right home at the right price by staying on top of market trends and making strategic offers with the help of trusted Real Estate Advisors.
Whether you’re looking to buy or sell your home, understanding the nuances of real estate buzzwords like “seller’s market”, “buyer’s market” and “balanced market” can help you feel more confident in your decisions.
A Seller’s Market
A seller’s market is when there are relatively fewer homes available for purchase than there are people looking to buy. Under such circumstances, bidding wars, subject-free offers and sale prices that exceed asking prices are common. These are a reflection of the competition and lack of options buyers are faced with.
Although many prospective buyers in the Lower Mainland are dealing with the challenges associated with a seller’s market — and have been for the past couple of years — there are still opportunities to find the right home. For example, while our detached home segment has been exhibiting seller’s market conditions for most of the spring, it is now moving towards a balanced market (as outlined in the latest Rennie Review). What most people may not realize is that detached market conditions in many neighbourhoods are currently favourable to buyers — underlining the importance of getting past the buzzwords and dramatic headlines and gaining a better understanding of ever-evolving market trends.
A Buyer’s Market
When the supply of homes available for purchase is greater than the demand for them, buyer’s market conditions are said to prevail. In such circumstances, conditions are more favourable for those looking to buy property. It all comes down to the basic “Economics 101” concept of supply and demand — more houses for sale and lower prices makes the market easier to penetrate. Those looking to purchase a home in a buyer’s market usually have more negotiating power and face less pressure to make a rushed purchasing decision.
On the other hand, sellers may find that they need to be flexible not only about the price they’re willing to accept, but also about the conditions a buyer wishes to include in the contract and the length of the purchase closing period. Sellers may also need to work more closely with their Real Estate Advisor to more strategically position their property within the marketplace so that it is as appealing as possible to buyers.
A Balanced Market
When the supply and demand of available homes are not skewed in any direction, the market is considered balanced. Under these conditions, there is no pressure for prices to move upwards, nor is there a tendency for them to fall. Overall, balanced market conditions represent the most stable environment for both buyers and sellers to conduct business.
Whether you’re a buyer or a seller, understanding current market conditions is critical to making sound decisions. Here at Rennie, we take an evidence-based, data-driven approach to understanding real estate dynamics in the Lower Mainland, and we encourage you to reach out before making your next move.
We understand it can be difficult to enter a changing real estate market. The Rennie Intelligence team is ready to help you navigate market changes. Don’t hesitate to get in touch with a Rennie Advisor today.