When it is time to buy or sell an important question to answer is who holds the power in the market. Today, after years of a strong sellers market with sellers calling the shots and getting what they want, the tide is turning. Homes for sale are staying on the market longer and price reductions are more common. Sometimes sellers are even offering incentives, like help buying down the interest rate for the buyer on their loan. That would have been unthinkable just a couple of years ago.
Still if you are a buyer or a seller do not expect a full reversal when you step into the market today. Certainly price points are leaning more in favor of the buyers than other price ranges. It is important to talk to your agent about the market in your price range.
What is a buyer’s market?
In simple terms, a buyer’s market occurs when the number of homes for sale exceeds the number of active buyers. It is a simple shift in supply and demand. When supply exceeds demand buyers have more choices, more room to negotiate and more time to make a decision. Another way to describe this is there is a high inventory of homes for sale.
What are other indicators of a buyer’s market?
Another sign of a buyers market is slower sales. The number of days on the market is increasing for sellers. The average days on the market now is a median of 51 days. That is longer than one year ago. This is advantageous for buyers because they have time to look and consider their choices.
Price drops are another indicator of a buyers market. With more competition and slower sales, sellers are starting to cut prices to stay in the game. Nearly one in five homes had a price reduction last month. The highest rate since at least 2016.
More motivated sellers can also provide concessions. These concessions can be for a rate buy down, closing costs or because the seller did not replace the carpet and is offering a carpet allowance. All of these indicators show that sellers are no longer in complete control of the market. Most agents working in today’s market would describe our market in Northern Colorado as a buyer friendly market. Buyers that are patient, strategic and ready to negotiate just might get a deal.
Whether you are a buyer or a seller it is important that you are informed. Do not rely on the headlines. Consult with an experienced agent to educate you on what to expect. Then you will know how to best navigate today’s market.