If you’re beginning the anxious process of preparing to sell your home, or starting to think about buying your dream home, you have to consider the current state of the property market.
Remember, the type of market can impact the outcome of buying or selling, and the most significant outcome, the price.
When evaluating the current state of the property market, we tend to segment it into two categories – a ‘buyers’ market’ and a ‘sellers’ market’.
The term ‘buyers’ market’ simply refers to a situation when it’s favourable for those who are buying property. This describes a market when the supply of housing is higher then the demand, so there are more people looking to sell houses than there are people looking to buy.
In a buyer’s market, sellers may have to accept a lower price than expected in order to sell their home, an ideal situation for purchasers to take advantage over sellers in price negotiations.
When interest rates are low or global conditions seem un-favorable, it can reduce confidence in the market. However, buyers’ markets and sellers’ markets don’t last forever. It’s hard to predict what the market will do with any accuracy, and things can change slowly. You could end up waiting months or years for things to change.
When circumstances do change, they may not change in your favor. Supply and demand is subject to change, which is how markets can transform so quickly. If new buyers enter the market, demand rises and then the seller has the upper hand. At the same time, if home sellers decide to remain in their homes, supply decreases.
The biggest outcome in a buyers’ market is an overall lowering of home prices. Sellers who are eager to move on may reduce the asking price many times over the period of months that it takes to find a buyer.
Buyers’ markets also encourage real estate investing, with buyers taking advantage of the low home prices and acting on the ‘buy-low, sell-high’ philosophy, which relies on expectations that the market will shift to a sellers’ market at some point in the future. Buyers’ markets can see homes remaining for sale for longer periods of time; this ultimately increases the cost of selling a home and increases the amount of work real estate agents must do to make the sale.
With market trends forever changing it’s important to seek advice from those who understand where the property market is sitting, this way you can get the best sale price, regardless if you’re buying or selling. And, that’s exactly why we’re here.