What is a buyers market? This is a term that you probably haven’t heard thrown around too much in the last few years. Rodrigo explains what it means, and also lays out the signs to look for that indicate a buyer’s market.
In the Asheville Real Estate market, the past several years have been all about sellers. Sellers have had the advantage when it comes to pricing properties, negotiating, and picking and choosing who they want to sell to. We’ve been in a seller’s market for almost as long as we can remember, and it’s hard to imagine anything else!
Believe it or not, though, buyers markets do exist – and, eventually, we’ll see one again in Asheville. So, while we may currently be in a seller’s market and will likely be in one for the foreseeable future, understanding what a buyers market is and how to navigate one is important to remaining nimble in the Asheville real estate market and recognizing when it’s time to switch strategies, whether as a buyer or as a seller.
So what exactly is a buyers market? Simply put, it’s when there are more properties than there are buyers in a given market. This gives the buyer an advantage because sellers are competing for a limited number of buyers – if they really want to sell their home, they’ll have to incentivize buyers to look at it rather than the many others available. It is, in short, the exact opposite of a seller’s market.
Now that you understand what a buyer’s market is, you need to know how to recognize one when it occurs. Here are four key factors to look for when determining whether you’re working with a buyer’s market:
- Higher days on market: If properties are sitting on the market for an extended period of time, despite being priced fairly, in good condition, and in desirable locations, you’re likely in a buyer’s market. Take a look at how long, on average, it’s taking properties to sell. If that number is rising over time and staying high, you’re probably in a buyer’s market.
- Sale price lower than list price: Check to see whether homes are selling for less than they were listed for. In a buyer’s market, buyers have the leverage to make lower offers, and sellers are often forced to accept offers significantly lower than the price at which they listed the home. In our current seller’s market, we typically see the opposite – homes sell for more than their list price because buyers are competing for the property. In a buyer’s market, homes sell for less than their list price, because sellers are competing for the buyer.
- Reductions in list prices: When looking at properties, check to see whether their prices have been reduced over time. This indicator generally goes hand-in-hand with higher days on market – the longer a property sits on the market, the more likely the seller is to reduce the price in an effort to sell it. If most properties are showing lower prices than they were originally listed for, you’re likely in a buyer’s market.
- Sellers making concessions: Are sellers making concessions to their buyers in an effort to close? Are they offering to pay closing costs, fulfill repair requests, including appliances, and so forth? If so, you’re likely in a buyer’s market. In a seller’s market, sellers don’t have to make concessions – there are plenty of buyers competing for every property, and buyers aren’t in a position to make demands. In a buyer’s market, however, there aren’t enough buyers to go around, so sellers have to compete with one another.
While it’s true that we haven’t seen a buyer’s market for quite some time in the Asheville real estate market and most of Western North Carolina, it’s likely that given enough time, one will come back up. When it does, by utilizing the indicators above you should be able to recognize it and know how to approach the sale or purchase of a property, whichever side of the transaction you’re on.
To find out more about buyer’s markets, seller’s markets, and how to navigate each as a buyer or as a seller, give us a call at 828-222-6443 or visit us online at AshevilleCashBuyers.com!