In real estate, as with other sales markets, there are three phases to the market. There is a Seller’s Market, Neutral Market, and the subject for this post, the Buyer’s Market.
For most markets, and most price ranges right now, we are in a Buyer’s Market, but what does that mean? You’ve heard it on the news. Clark Howard has even said it. Simply put, a buyer’s market is one in which sellers outnumber buyers, so buyers have the power.
One thing to keep in mind is that even in one general area (Atlanta or Gwinnett County for instance), there will be hot spots and cold spots. There will also be hot and cold price levels. So, while real estate markets are local phenomena, that “local” might even come down to the level of a particular subdivision or price range. Houses in the $500k range might be stagnant, while $200k can’t stay on the market. Condos might be flying out of the listings, and single family homes won’t move without discounts.
So, we’ve established that a Buyer’s Market gives buyers more power when dealing with sellers. But, why do we have a Buyer’s Market in the first place? Well, there can be a lot of contributing factors. Some of them would include:
- coming off of a hot seller’s market
- local job cuts, large employer closing or other economic problems
- tightening mortgage market
- rising mortgage rates
Of course, that list isn’t complete, there will always be new and unique factors that will present to launch the market into a slowdown. But, there is one thing that can end a Buyer’s Market just about every time… (I’ll get to it in the “What should a seller do” section)
So, you’re a buyer… what does it mean to me?
Well, it means that sellers are going to be more inclined to work with you on the price or other concessions. Of course, one issue that often arises in buyer’s markets is that financing is tough, so make sure you have yours in order so you don’t lose earnest money or spend money on wasted inspections or other items. A Buyer’s Market doesn’t mean that sellers will cut 40% from the price, but it means that if they don’t want to sell at a price you want to buy, there is another house to offer on… if there isn’t, then it isn’t a buyer’s market.
But, Lane, I’m a seller… what can I do?
The ways to overcome a buyer’s market are to price appropriately (lose the “I sold for more than the people up the street” ego), stage effectively, market well, make sure your house is in top condition, and be ready to work with the serious buyers. Serious buyers. Make sure that you aren’t pulling your house off of the market for buyer’s that can’t perform.
Don’t hesitate to shoot Lane a message if you have any questions, or need any help. And check out the new links for FREE Property Searching, FREE Comparative Market Analysis and FREE Market Reports. They are near the top of the page…
