When a person is buying or selling a home, it is useful to figure out how the local real estate market is behaving. During a seller’s market, sellers have more negotiating power, and in a buyer’s market, the buyer has more leverage when making deals. If a person is in a buyers market, they might see one or more of these signs.
A Large Amount of Inventory
One of the first signs of a buyer’s market is an increasing amount of inventory. More houses on the market occurs when the number of interested sellers far outpaces the amount of interested buyers. Since each buyer ends up with plenty of great properties to choose from, a lot of the homes will go unsold. People trying to figure out if they are in a buyer’s market may find it helpful to compare the number of current listings to the amount of listings available at the same time last year. This can show whether inventory numbers are higher than usual.
Homes That Stay on the Market for a While
Another data point to look at is the length of time that a house stays on the market. Instead of going under contract the second they are listed, homes may go unpurchased for months. Since there are so few buyers, it will take a while for a homeowner to find someone who wants to buy their house. In a buyer’s market, there is less demand to act fast. Buyers will have the luxury of browsing a lot of homes and negotiating for a while, so it is normal for the entire home buying process to take longer.
Decreasing Real Estate Prices
When a home is listed for sale, take a look at the listing history. This can show potential buyers how much the sellers originally asked for and whether they have dropped their price. Homes with rapidly declining asking prices are an indication of a buyer’s market. This sign happens because homeowners start to lower their prices in an attempt to appeal to potential sellers. In addition to automatically lowering prices, sellers will also be more accommodating during negotiations. They are more likely to accept lower prices or agree to perks like paying closing costs for the buyer.