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Working the buyer’s market to your advantage

Posted on: April 16th, 2018

Supply and demand, we are already familiar with these terms as they influence crude oil to real estate and everything in between. At any given point of time, having one of them supersede the other means an imbalance that effects the price to either rise or fall. There are times when both supply and demand work in tandem and the prices at an equilibrium position. In real estate like any other industry, this fundamental principle of economics plays an important role to determine the market type. An excess inventory in the market results to a lower price and as soon as it gets absorbed the price starts to rise again.

 

The Buyer’s Market
When supply exceeds demand and there are more sellers competing with each other and trying to get a desired price for their properties giving the purchaser an advantage to negotiate the price. This situation is clearly a buyer’s market and typically houses sell for less and stay in the market for longer putting investors in a position to capitalize from the softened prices. A buyers market is best for first-time buyers as it allows to buy property at a lower price that will certainly rise when market situation changes. Investors can take advantage of cracking a good deal at a lower price and many savvy investors only buy during this market situation.

 

Characteristics of a buyer’s market:-

> More property listings in the market than a past period

> Properties spend more time in the market before being sold

> Softened average prices compared to a past period

>Advertising offers that portray a need to sell

 

 

Is it a good time to buy?
In a buyer market, the question that arises is: should I buy now or wait? The simple answer is, a buyer’s market will soon usher into a different situation where prices will start going up and you’ll lose the opportunity. There is always a good time to buy provided you are able to identify the property that has the potential to appreciate as soon as the market situation changes. The immediate benefit of buying in this market is getting more space for the same amount of money, this works well for end-users as they can enjoy a larger house. Another advantage of a buyer’s market is that banks attract buyers by offering competitive mortgage rates and other incentives that mean a lot of saving in the long run.