Before you buy a property, you might want to assess the local real estate situation. The housing market usually goes through cycles, transitioning to a buyers’ market, sellers’ market, or neutral market. Although they say that the best time to buy is when you’ve found the property you like and can afford it, doing so in a buyers' market will get you the best deal. Where is it a buyers’ market right now?
Whereas the time of year may slightly influence property prices, most of it comes down to supply and demand. In a buyers’ market, the housing supply usually exceeds demand. As a result, the competition for properties is low, and buyers have ample time to evaluate the listings for their right pick. The low demand also means many sellers are desperate to sell, giving buyers the upper hand in negotiating prices.
In contrast, in a sellers’ market, sellers are more in control of how deals close. And in a neutral market, the supply and demand forces are balanced, and sellers and buyers are mostly in equal footing when negotiating deals.
How do you know you’re in a buyers’ market?
A major feature of a buyers’ market is that the property inventory exceeds demand. A look at home listings and recent home sales can tell you if this is the case. According to Rocket Mortgage, if you divide the number of current home listings by the number of homes sold in the last 30 days, and you end up with a figure above seven, you’re in a buyers’ market. If the figure is below five, you’re in a sellers’ market.
Other signs of a buyers’ market are lower prices, properties selling for less than their listing price, and homes staying on the market longer.
Where is it a buyers’ market right now?
At the peak of the recent housing market boom, properties sold almost as fast as they were listed. However, homes are lingering on the market longer, a sign that the market is shifting in buyers’ favor. According to a Realtor.com report, cities with long listing times include Houma, La., (more than 58 days), Utica, N.Y., (55 days), and Iowa City, Iowa (more than 51 days). And according to Redfin, home prices are falling in Denver, Salt Lake City, Tacoma, Wash., and Boise, Idaho.