You’ve heard both terms before, but you might not know what it means, or what the benefits to each are.
Unpopular opinion: all markets are good markets, for someone. A buyers market is just that, a market good for those that are buying. Sellers market is the time to sell.
So what does it mean?
The real estate market is constantly changing. Time has shown that the housing market will go through its known cycles. Timing it is what’s hard and unpredictable.
A buyers market is when the buyers have an upper hand. There is an influx of inventory to choose from – more people selling than there are buyers to buy. Typically this results in more days on the market, and sellers that are a little more desperate to sell and a bit more flexible with the price. This market typically benefits buyers, but the downfall is if they need to sell their house in order to buy, they may be in high competition with other sellers.
A sellers market, on the other hand, is the complete opposite. This happens when there is a shortage of inventory and an influx of buyers. Edmonton experienced a sellers market earlier this year. The result of a sellers market is much more competition for buyers, little competition for sellers, and many houses selling in multiples (bidding wars). Some houses even sell for over asking – a sellers dream! When Rob and I bought our third property this year, another foreclosure, we were in a bidding war with three other people and won by offering a couple grand over asking. But that’s nothing compared to the market in Ontario, specifically the GTA and surrounding cottage country. The market there is so in demand that houses are selling a couple hundred thousand over asking.. yikes! Great for sellers, not great as a buyer. However, if you are a seller trying to relocate in the same market, a sellers market can be a blessing and a curse. It’s always important to make sure you’re working with a knowledgeable agent that knows how to navigate these markets!
And then we have a balanced market – this is when there’s roughly an equal ratio of sellers to buyers. It benefits both parties – houses move at a good speed but not with overwhelming competition. The economy is steady, and houses are retaining their value.
Knowing what type of market you’re in and what to expect will help set your expectations for how your home buying or home selling journey will go! Of course, if you’re working with me, I’ll always provide updated market stats and a comparative market analysis. Another benefit of working with a REALTOR®!