You may have heard the term buyer’s market vs seller’s market but do you know what defines each of these types of market? In order to determine the best season for you and your real estate needs, use this helpful overview!
What Is A Buyer’s Market?
This is a situation where there are more homes for sale (supply) than demand.
Who Is A Buyer’s Market Good For?
The natural answer would appear to be the buyer, but more specifically, if you are a first-time home buyer this is the time for you.
Who Is A Buyer’s Market Not Good For?
Understandably, a buyer’s market is difficult for sellers. Due to the large competition of houses available for sale, it is likely that your particular property could remain on the market longer than you might have initially expected or hoped. In this situation, you may be forced to lower your listing price or make other concessions to remain competitive and secure a buyer.
What Is A Seller’s Market?
A seller’s market is the opposite of a buyer’s market. This is when the demand for homes in a particular area cannot meet the supply. That is to say, the number of listings is far smaller than the number of home buyers.
Who Is A Seller’s Market Good For?
If you are looking to sell your home, this is the perfect season for you! Because there is such a high demand, there is a good probability that many people will be interested in your property, potentially resulting in multiple offers and a bidding war. This means that you could possibly sell your home for higher than its listing price.
Who Is A Seller’s Market Not Good For?
People who are looking to buy in a seller’s market may need to save up more money than they had initially planned. In order to successfully bid on a property, a buyer may need to offer more than the listing price or provide a larger deposit. Alternatively, buyers may have to adjust their expectations by moving to less central neighbourhood or into smaller properties to help keep their costs down.
Buyer’s vs Seller’s Market – How To Tell?
The real estate market fluctuates depending on the economic climate as well as the time of year. The summer months tend to be a buyer’s market, and the winter tends to be a seller’s market. However, it is important to remember that your city, or even your neighbourhood may behave differently than your area at large.
Speaking to the economic aspect, cities with many available jobs, such as Toronto, will generally be a seller’s market regardless of the time of the year. While there will certainly be fluctuations throughout the year, though they may not be as varied as an area that has a struggling economy, which will generally be buyer’s markets.
Another great way to tell if you are in a buyer’s or a seller’s market is to look at the inventory of homes for sale in the area you are interested in. If the inventory is low, it is likely to be a seller’s market, and vice versa with a buyer’s market.
Ultimately, in the battle of buyer’s vs seller’s markets, what is most important is that you work with a real estate agent who knows the neighbourhood well so they can help you optimize your purchase or sale. If you would like to discuss further, please feel free to reach out to me. I can help you buy or sell your home in any market!