Buyer's Market and Seller's Market

If you are in the real estate market to buy or sell your home, then it is important to understand the key differences between a buyer’s and seller’s market. The common misconception in the real estate market is that some seasons offer better conditions for buyers and the remaining seasons are profitable for the sellers. However, this is far from the truth. The real estate market is primarily influenced by economic conditions as well as the nexus between supply and demand. Let’s understand the buyer’s market and seller’s market in detail.

What’s a Buyer’s Market and Seller’s Market?

A particular market can be considered a buyer’s market when there’s an excess of homes on sale, but there are only a few buyers to purchase them. On the other hand, a seller’s market is recognized by the excess of buyers but with fewer homes available on sale.

What Happens During a Buyer’s Market?

In a buyer’s market, the buyers will take adequate time and weigh their options. This is because they are not under pressure to make a quick decision and enter the market to compete for the sale of a particular property. The home prices are usually stable or may even drop further as the buyers have more leverage in this type of market.

What Happens During a Seller’s Market?

On the other hand, the prices of homes will most likely increase in a seller’s market. The sellers can expect multiple bids coming in for their respective homes and there is a possibility of two or more buyers entering into a bidding war. Thus, the sellers possess the power to negotiate in this market and can therefore expect to earn a good profit. In addition, there also lies the likelihood that buyers who put in low offers on the table or have several conditions might not be able to buy a home that suits their taste.

What Is a Balanced Market?

Yes, apart from the buyer’s market and seller’s market, there also exists a market that denotes a balance between the buyers and sellers. A market is said to be in balance when the number of homes on sale and the buyers to purchase them are equal in number. In a balanced market, you will most likely come across reasonable prices, realistic offers and less friction between buyers and sellers.

At Edmonton Home Pros, we have a team of skilled, experienced and dynamic professionals who believe in providing refined services and propagating the values of honesty and integrity in our business. We provide services such as buying and selling properties and initiating investments in real estate. Reach out to us if you plan to enter the real estate market and we will help you understand real estate terms and also assist with your buying and selling needs.

Posted by Stephen Lau on


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