What is a "Buyer's Market"?
Most real estate practitioners consider a typical market to be one in which homes take an average of six months to sell. Realtors keep track of this number by keeping up with the days on the market (DOM) of every home listed and sold.
If the number rises above six months inventory on hand, then the market is swinging into a buyer's market. If it falls below, it is becoming a seller's market.
A buyer's market is one in which there are too many homes on the market for the number of buyers. Homes take longer to sell and prices fall.
Sometimes buyers believe that winter time is a buyers' market. Homes offered for sale during slower times of the year are generally aggressively marketed, and may not sell for a significantly lower price than they would if they were marketed in a busier period.
In the spring, a seasonal adjustment occurs, and more homes come on the market. Buyer activity picks up as families with children (still the single largest buyer demographic) buy homes so they can move during summer vacation.
A buyer's market can easily exist in the spring, if conditions dictate that there are more homes than buyers, falling prices, and longer DOMs.
Sometimes a buyers' market can be created that lasts for a long time. The exit of one or more major employers from a community, a natural disaster such as a flood or earthquake, or some other catastrophic event can affect home values in an area for years.
As homes become more competitive, buyers realize that their interest is at a premium and they will increase their demands to sellers. Those nice chandeliers that normally would not be included in the purchase price of the home, now become a bargaining chip for the buyer.
The buyer may ask the seller to provide a home warranty at the seller's expense, or for the seller to pay more of the closing costs than usual out of the settlement proceeds, or any number of other contingencies.
The one certainty that can always be counted upon is that one side of the market will never stay on top forever. In fact, it can turn on a dime. The same area that remains depressed for a period of time can make a comeback as lower prices stimulate reinvestment. Contact your REALTOR® for more information about market conditions in your area.
-From my Newsletter @ http://www.SoldByWallen.com
If the number rises above six months inventory on hand, then the market is swinging into a buyer's market. If it falls below, it is becoming a seller's market.
A buyer's market is one in which there are too many homes on the market for the number of buyers. Homes take longer to sell and prices fall.
Sometimes buyers believe that winter time is a buyers' market. Homes offered for sale during slower times of the year are generally aggressively marketed, and may not sell for a significantly lower price than they would if they were marketed in a busier period.
In the spring, a seasonal adjustment occurs, and more homes come on the market. Buyer activity picks up as families with children (still the single largest buyer demographic) buy homes so they can move during summer vacation.
A buyer's market can easily exist in the spring, if conditions dictate that there are more homes than buyers, falling prices, and longer DOMs.
Sometimes a buyers' market can be created that lasts for a long time. The exit of one or more major employers from a community, a natural disaster such as a flood or earthquake, or some other catastrophic event can affect home values in an area for years.
As homes become more competitive, buyers realize that their interest is at a premium and they will increase their demands to sellers. Those nice chandeliers that normally would not be included in the purchase price of the home, now become a bargaining chip for the buyer.
The buyer may ask the seller to provide a home warranty at the seller's expense, or for the seller to pay more of the closing costs than usual out of the settlement proceeds, or any number of other contingencies.
The one certainty that can always be counted upon is that one side of the market will never stay on top forever. In fact, it can turn on a dime. The same area that remains depressed for a period of time can make a comeback as lower prices stimulate reinvestment. Contact your REALTOR® for more information about market conditions in your area.
-From my Newsletter @ http://www.SoldByWallen.com
posted by SoldByWallen-Bob Wallen at 12:06 PM
0 Comments:
Post a Comment
<< Home