What is a Buyer's Market?

A buyer's market occurs when there are more homes listed for sale than there are buyers available. This means that the demand for homes is lower than the supply. In a buyer's market, there is typically a surplus of inventory compared to the number of interested buyers.

One of the key indicators of a buyer's market is lower home prices. Sellers often have to settle for selling their homes at or even below the list price in order to attract buyers. It is difficult to increase the asking price significantly without potential buyers considering other similar homes in the neighborhood.

Due to the high level of competition, sellers are at a disadvantage in a buyer's market. Many sellers choose to accept a lower selling price rather than waiting for the right buyer to come along.

Another sign of a buyer's market is a longer-than-average time on the market for homes. If you drive through your neighborhood and see more "for sale" signs than "sold" signs, it is likely a buyer's market. Bidding wars are rare in this type of market, as buyers have a wide range of options to choose from and are unlikely to pay more than the asking price.

What is a Seller's Market?

In a seller's market, the number of buyers outweighs the number of available homes on the market. This means that there is high demand for homes and limited supply. In such a market, a single property often attracts multiple buyers, leading to bidding wars. Selling your home in a seller's market can be advantageous as you can potentially sell it for a higher price than the list price or even your lowest acceptable price.

However, it is important to be aware of the seller's advantage when buying a home in a seller's market. The opportunity to negotiate a lower sale price on a property that other buyers are interested in is unlikely if there is significant competition.

In fact, an offer from a competing buyer could potentially cost you the opportunity to purchase the property altogether.

The buyer’s market has the following characteristics

Home sales are slowingThe homes are sold for less than the list priceThe domestic price index is decliningThere are many homes available for sale

The seller’s market has the following characteristics

Houses are selling fastThe home sells at or above the list priceThe price of homes is risingThere are not many homes for sale

Knowing where the market stands is helpful when buying or selling property. As a property practitioner, I understand the dynamics of the South African (Roodepoort) real estate market and can assist buyers in taking advantage of the current conditions. My expertise in negotiating and market analysis allows me to provide valuable guidance to both buyers and sellers, ensuring they make informed decisions in this buyer-friendly environment. If you're considering buying or selling a property, please feel free to reach out to me at any time for personalized assistance. - Morne Prinsloo - RE/MAX Masters Roodepoort.