Buyer’s Market
When you are getting into the Real Estate market and learning new terms, inevitably you will hear someone say, “It’s a great time to buy – it’s a buyer’s market right now!” Or, “It’s a seller’s market right now, wait for a buyer’s market.” But what does that even mean?
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The basic definition of a buyer’s market is when supply exceeds demand. This means that there are plenty of houses out there for sale, and not enough buyers. Many times this will bring the cost of houses down, as the sellers need to be competitive if they want their house to sell before others. This kind of market is more prevalent in the slower seasons like fall and winter.
During a buyer’s market, it is a great time to purchase a home. There are plenty of homes to choose from, the houses aren’t moving too fast, and you may be able to get a great house at lower price than during a seller’s market.
Seller’s market
If you do find yourself needing to buy a house, and you keep hearing that it’s a “seller’s market”, it means that supply is low and demand is high. When there are a lot of buyers looking to purchase in a certain town or area, and there aren’t enough houses for sale – it’s a seller’s market. This results in higher asking prices, more competitive buyers, and often multiple offers. Usually this occurs in the Spring market here in New Jersey. Inventory is on one day and gone the next. Seller’s are happy, but buyers are not.
So, when is the best time for you to buy? Really, during a buyer’s market you will have the best luck. In a seller’s market, prices will be higher and there will be more competition. Sometimes during a seller’s market, people find themselves questioning if they should just wait till the market turns, or rent. Thinking about renting? Look here for the pros and cons of renting vs. buying. You need to think about what is best for you and your situation. Are you able to wait? Do you have the funds to compete?
If you keep an eye on your market, you will know when it’s a buyer’s or seller’s market. Take a look at how long houses stay for sale. Ask your Realtor. It’s a good thing to know and understand when you are house shopping.