What Does a Buyer’s Market Really Mean?

Posted by on Wednesday, December 7th, 2011 at 5:40pm.

opportunity

 

You may have heard about today’s market being a buyer’s market. But what exactly does this mean?

In general, a buyer’s market refers to a real estate market that is beneficial to buyers. A buyer’s market means that a number of factors are in the buyer’s favor creating buying opportunities. This usually means the following:

• There is a larger inventory of homes – In a buyer’s market, you can be sure that there are a lot of homes on the market from which to choose. In other words, the supply is greater than the demand. As a result of more sellers and less buyers, the price of homes during a buyer’s market usually drops. In addition, buyers may be able to negotiate better prices and terms with sellers because sellers may be anxious to sell their homes after an extended time on the market…which brings us to our next reason:

• More time on the market – In a buyer’s market, because there is more supply than demand, homes tend to stay on the market for a longer period of time. A home that has been on the market longer than the local average may be a better deal because the sellers may be quite anxious to sell their home after waiting it out for so long.

• Stricter lending standards – Today’s buyer’s market is unique because it also comes with stricter lending standards. Of course, tighter lending standards are just one piece of the pie when it comes to this buyer’s market. However, in general, because fewer buyers are being approved for home loans, the number of potential buyers drops even lower, creating even more of a chasm between supply and demand.

• Smaller pool of potential buyers - Stricter lending standards create a smaller pool of buyers in today’s buyer’s market, thereby creating less competition in the market. Less competition and an increased inventory of homes on the market mean that buyers have their pick of real estate,and sellers are likely quite anxious to sell their home to the first buyer that comes their way.

16 Responses to "What Does a Buyer’s Market Really Mean?"

Gabe Sanders wrote: Couldn't agree more with this great post. If you can afford it or qualify for a loan, the prices and rates are at historical lows and I know many will miss the boat waiting for the bottom of the market.

Posted on Saturday, December 10th, 2011 at 11:59am.

Carmen Brodeur wrote: Today's market is definitely a buyers market. There are lots of people sitting on the fence that are waiting for it to hit bottom. Those people will probably miss the bottom and end up paying more. This is a great time to jump into the market.

Posted on Monday, December 19th, 2011 at 7:19am.

Debbie Gartner wrote: You are so right. Right now, it seems to be a great time for first time home buyers and those trading up. You are right in that it s a unique time w/ lending getting tighter and that limits things even further...so it is sometimes tricky for those trading up, if they can't sell their house now.

Posted on Monday, December 19th, 2011 at 7:19am.

Jay Wojnas wrote: Excellent post, and I would like to add one more thing. Just because everyone says it is a buyers market does not mean you can get a house for almost nothing. I think the general public sees all the doom and gloom on the news and thinks they can offer half the listing price. Granted there is normally some room for negotiation but I think some people are just too unrealistic.

Posted on Monday, December 19th, 2011 at 7:19am.

Danny Nappi wrote: This is a buyer's market especially here in the Tampa Bay area. I agree with Gabe many people are going to miss out by trying to time the market.

Posted on Tuesday, December 27th, 2011 at 6:51am.

Connecticut houses for sale wrote: This is very nice blog.i love to read it because it provides always good information regarding house market.Thanks for this nice blog.

Posted on Tuesday, December 27th, 2011 at 6:51am.

Paul wrote: The best time to take advantage of a buyers market is when you're either purchasing an investment property or your first home, if you're selling to move then you're not really going to gain.

Posted on Saturday, December 31st, 2011 at 4:06pm.

Daniel with Hughes Group wrote: Buyer's market? Yes indeed, but that doesn't mean that the sellers are always getting cheated or slighted out of profit. I myself would say that in a buyer's market the playing field has just been leveled - sellers tend to have the upper hand, am I right?

Posted on Thursday, January 5th, 2012 at 7:00am.

Seattle Homes wrote: Great post and summary. Definitely great information to share with my buyers for Seattle homes! Thanks!

Posted on Thursday, January 5th, 2012 at 7:00am.

Teyona wrote: An amazing article. This is a must read article for future home buyers and real estate agents.

Posted on Thursday, January 5th, 2012 at 7:00am.

John Evan Miller wrote: There is definitely a buyers market that allows the buyer to negotiate more now than every before; however, sellers are still not going to let their property leave their hands for ridiculously low bids.

Posted on Sunday, January 8th, 2012 at 7:12am.

Real Estate Calgary wrote: It will surely be important to make sure that real estate investments will also come with the best benefits for home buyers.

Posted on Sunday, January 8th, 2012 at 7:12am.

Chris wrote: It's definitely a buyer's market in the Austin area right now. The good thing is... Buyer's are also buying!

Posted on Friday, January 13th, 2012 at 12:44pm.

Jeff Buettner wrote: Great article on what makes a buyer's market.

Posted on Friday, January 13th, 2012 at 12:44pm.

Augusta GA Homes wrote: Great post! Definitely great information to share with my buyers in Augusta! Thanks!

Posted on Monday, January 23rd, 2012 at 4:12pm.

Chris Adams wrote: I couldn't agree more when it comes to buying a home in this current market. You never fail to give some valid points Tina! Those buyers opportunities are very accurate and most first time home buyers needs to start thinking before the market hits its peak again. Thanks for sharing this article.

Posted on Sunday, May 6th, 2012 at 9:18pm.

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