This increased competition often makes people willing to spend more than they normally would on a home, allowing sellers to increase their costs at or above the original sale price with little or no rejection from buyers. As you may have guessed, the power dynamic tilts toward the buyer in a buyer's market and toward the seller in a seller's market. These conditions give buyers an advantage over sellers because when supply is greater and demand falls, the market is forced to respond. However, if a large percentage of sellers lower their original selling price, it's a sign that the market could be changing in favor of buyers.
A seller's market occurs when demand for housing exceeds supply, which means that there are many interested homebuyers, but there is a shortage of real estate inventory. Sellers are likely to lower their sales prices in a buyer's market and raise them in a seller's market. A seller's market exists when people who want to sell their homes have more bargaining power than potential buyers. If you're a buyer looking to buy real estate in a buyer's market, this is the best time to do so.
In a seller's market, homes sell faster than average, requiring more buyers to compete with each other to secure a property. In a market that favors buyers, sellers and their real estate agents have to make a much greater effort to make their homes stand out through social media, open days and advertising. These market conditions give buyers an advantage over sellers, forcing the market to respond accordingly. Buyers have very different expectations when looking for a home in a buyer's market than in a seller's market.
An economic recession, the departure of a major employer from the area, high crime rates and overconstruction are all potential causes of the buyer's market. Other possibilities include asking the seller to be flexible with the closing date, asking them to include appliances in the price, or asking them to include the dining room set, patio furniture and grill. Although the best time to buy real estate is in a buyer's market, that doesn't mean that finding a home in a seller's market is out of the question. If the result is longer than 6 months, the market could be turning into a buyer's market, as there are more homes for sale than demand.