A “buyer’s market” happens when people looking to buy a home have a stronger bargaining position than the sellers have. In a classic economic sense, a buyer’s market occurs when the supply of homes available for sale exceeds the demand for them. However, other things in real estate create a buyer’s market.
Causes Of A Buyer’s Market
Besides having too many homes for sale and too few buyers, a buyer’s market in real estate may come from widespread credit market problems. There may be plenty of buyers interested in homes that are for sale, yet they may not be able to get a loan to buy the home. This may be caused not only by the credit history and qualifications of the buyers but also by the lending institutions’ available funding to make loans.
Another thing that can cause a buyer’s market for homes to suddenly emerge is a major relocation or closing of a large employer in an area. If the jobs disappear for many people, then they may have to move to find work.
Ways to determine if a specific area is a buyer’s market include tracking the median number of days that homes stay for sale on the market listings. Another strong indicator is