Judy Lindsay Team News

Buyer's or Seller's Market?

July 11th, 2016

There’s always the questions on whether or not we’re sitting in a Buyer’s Marketing or a Seller’s Marketing. The best kind of market to be in, for both parties, is a balanced one. However, as we saw years ago (and are still seeing in hot housing markets such as Toronto and Vancouver), it was a Seller’s Market all the way. This year, we started off with a lean towards a balanced market, which means that those bidding wars we may have gotten used to started becoming a thing of the past. The housing market is cyclical, meaning that the real estate market has a cycle, like all businesses. The cycle is influenced by several key factors that include: mortgage interest rates; employment growth; investment growth; construction; immigration; government assistance programs for first-time buyers; and gravitational forces caused by major weaknesses in the local and world economies. All these factors, although they may seem like a lot, give influence on whether or not the market is sitting in a Buyer’s land or Seller’s land.  

Seller’s Market

This type of market is characterized by low interest rates, many qualified buyers, and fewer homes.  When this occurs, bidding wars are inevitable and housing costs can increase substantially. This is great news for those who are looking to sell their homes, but can be a little stressful when you’re looking to buy, especially if this is your first-time home. Those who are looking to get into a home need to watch how much they will be bidding up the price. What this means is that you need to look at how much the home is really worth, how much it will be worth in years’ time, and if it is worth the investment. If you’re paying 30-40 thousand over asking price for a home that just simply isn’t worth it, and suddenly the market turns balanced, or worse, into a buyer’s market, you won’t be getting that money out of your home. If you don’t have to move, really want that home, and can stay and wait until the housing market becomes hot again (which it inevitably will; it all depends if you will be 35 when moving or 85), then if you’re comfortable with the price you will be paying, buy that home of your dreams.

 Buyer’s Market

This occurs, in contrast, when there are fewer homes on the market and many buyers. As a result, a well-kept, well priced home in the most desirable area may be sold under asking price as home owners are eager to sell their property.  In this type of market, sellers ask themselves whether to lower the price or take the property off the market and wait. If you’re needing to move, paid more than what the home is worth (see hot housing markets above), this may be a bad time of year for you. On the flip side, if you’re looking for a new home, or a first home, this is a fantastic time to get yourself into the real estate market and find that dream home you’ve always wanted. Or, can afford. Whichever your bank allows.

The statistics from January to March, 2016 showed that there was more inventory (homes) than buyers, thus causing a buyer’s market. This emerged from the late 2015 statistics.  A strong spring showing has again shifted the market back to a balance between buyers and sellers. This is the ideal time for both buyers and sellers.  This proved to be a strong showing even with the increased inventory.

There are always exceptions to the rule.  Even with the statistics, a home may still fall under the category of a Seller’s market even if the cycle shows a Buyer’s Market. This usually happens when a home is ina specific price range.  This price range may have fewer buyers with a lot of inventory.  How will you know?  Consult with the Judy Lindsay Team.  We are able to help you with the logistics of the market and place you in a good position to buy your home.