Buyers Market vs. Sellers Market: What's the difference?
Posted by Garman Group on
What exactly is a buyers market and how does this affect you in Canada? We’re going to focus on buyer and seller markets this post and hopefully shed some light on where Canada’s market is headed. “You've probably heard a lot about how Canada is entering a "buyer's market" for real estate and, yes, it has become quite clear that we are. However, what is not so clear is what a buyer's market really is, and what buyers and sellers can do to navigate these new conditions, (Huffington Post).” It’s becoming increasingly difficult to navigate real estate and the game is changing. We wanted to write this post to give some insight into our world and also define some terms that have been swirling around the Internet. Understanding the housing market relies on a large variety of factors. Our top areas of concern and interest lie in tempo of the market, confidence in the economy, competition, insurance companies along with the buyer and the seller.
Buyers Market: This is when there are more homes for sale than there are buyers. “This could be a result of high unemployment, fear of interest rate increases or other factors which make people think twice about moving up into a larger home or purchasing a home for the first time, (rahb).” The advantage in this housing market is that buyers can take their time and really survey their options before making an offer. This type of market also usually leads to the prices of homes lowering.
Sellers Market: This market occurs when there are fewer homes for sale to a larger pool of buyers. “The factors at work could be sustained low interest rates, high employment rate, legislative changes which make it easier to purchase a property – events and conditions that make buyers think it would be a good time to buy a big ticket item like a home (rahb).”
You may be wondering what this means for Canada? “Essentially, we were experiencing a ’seller's market’ for quite some time, meaning that prices were continuously going up and, if homeowners chose to sell, they were getting quite some bang for their buck — primarily because houses were rapidly increasing in value. This was happening because demand had exceeded supply, leading to bidding wars and increased prices, (ratesupermarket).” With new rules and regulations coming into the picture this year, along with a bump in rates, market conditions have begun to drastically change. The question for most people is whether they should buy or sell first in these markets and how they can avoid being out a lot of money. By making a conditional offer on a home that only stands if you sell your current home and making a negotiable closing date are the two best ways to avoid this.
The team at The Garman Group is committed to offering you the best service possible whether you’re selling or buying. Contact us online now!