Buyer’s VS Seller’s Markets? And Some Tips for 2022
If you’re remotely aware of the field of economics, you should know about the ebb and flow the markets go through. These highs and lows are primarily dictated by two simple factors that operate the whole economic structure: Demand and Supply.
Similarly, in the housing market, the demand and supply of housing creates either a seller’s market or a buyer’s market. Each market has some very defining features.
It is extremely important to know your local housing market before making a buying decision. Nuances of each market and knowing what they are, can make a huge difference in the investment of your next pre-construction condo.
We will look at what each market is like and what are some of its salient features so that the next time you’re looking to invest in a presale condo, you would know what markers to look out for so that you can make an informed decision.
What is the difference between A buyer’s market and seller’s market?
If you’re looking for a very simple difference between a buyer’s or a seller’s market, you should think about how many sellers and buyers there are in the market.
A seller’s market happens when there are more buyers in the market than there are houses for sale. When this happens, there’s a higher demand for housing than there is supply.
In a seller’s market, the upper hand is with the sellers, as they can dictate the pricing of the houses.
A buyer’s market occurs when there are a higher number of homes for sale and less number of buyers to pick these up. When this happens, there’s a higher supply and not enough demand.
As the name suggests, in a buyer’s market, the buyer has the advantage as they can negotiate better deals due to the supply being so high and buyers having more alternatives and options.
Buyer’s Market: Important Features
- More homes on the market than there are buyers
- Prices are typically lower due to a higher supply in the market
- Housing surplus slows down the rising prices and can sometimes lead to price reduction as well
- Home are more likely to sit unsold
- Buyers have more leverage to negotiate and also have more options to choose from
Seller’s Market: Important Features
- More buyers in the market than there are homes
- Prices are typically higher due to a higher demand for housing
- Homes typically sell very quickly
- Seller’s have the negotiating power here as there are usually multiple offers on a home
What is a Balanced Market?
As the name suggests, a balanced market literally means that there are an equal number of homes for sale and buyers to purchase them. With the competition being more equal, you usually find that prices are more stable and the offers are more reasonable.
There is also less friction between the buyers and the sellers as the market is going at a steady rate.
Buyer’s Tips: Tips for buying in a Buyer’s Market:
If you’re looking to buy a pre construction condo, it is a good practice to wait for a buyer’s market to close a deal. A buyer’s market not only gives you lower pricing for your dream home, but also as a buyer, you have less competition which puts you in a better position to negotiate better deals.
Here are some important tips to keep in mind when you’re buying a presale condo in a buyer’s market
Tip #1: See as many properties as possible
As we have mentioned before, in a buyer’s market, there is a higher number of home listings. This can be in your favour as a buyer.
Make sure you cover all your bases and see as many properties you can before closing in on a deal.
Knowing what is available on the market is very important as it helps you budget properly. A properly planned budget is the key to finding the house of your dreams, not just the house you can afford.
This is where our extensive pre-construction condos directory comes in handy as an important buyer’s resource. On ipresalecondos.com you can look at all the listings in your preferred area and directly sign up to get pricing and floor plans!
Tip #2: Take your Time!
You’re in the buyer’s market, what’s the hurry!? The benefit of being in the buyer’s market means that you have enough time to search, view and analyse all your options.
When you are not pressed for time, it is always a good idea to take your time and most importantly – not to rush into any purchase if that’s not what you need or if you need to see more properties.
The more you search, the better information you will have to make a wise buying decision.
Tip #3: Negotiate to your advantage
When the market is on your side, only a fool would pay a premium price for the home they want.
Knowing the market and the way it has worked historically is something that is invaluable in the housing market. What projects have sold at what pricing with what floor plans / amenities in the past can show you how you can negotiate the best deal for your dream condo. But this experience is hard to come across.
With over 20+ years of experience selling pre-construction condos, our team finds the best units and the best prices for you. When you become a member with ipresalecondos, you get exclusive access to the best upcoming presale condos projects so you are first in line to negotiate the price you want.
Buyer’s Tips: Tips for buying in a Seller’s Market:
Although a seller’s market gives sellers the upper hand, buyers in this market can make their life easier by following some tips to keep in mind if you are buying in a seller’s market.
Tip #1: Don't wait too long
A higher number of buyers means there is a lot of competition if you’re buying presale condos. In this market, any hesitation in making an offer means you can say goodbye to that dream condo you were looking for.
In a seller’s market, you need to be prepared to make an offer and make it fast!
Tip #2: Get pre-approved for mortgage
In a seller’s market, buying a home is all about timing. Being prepared is a good way of putting yourself ahead of the pack.
Make sure you get a pre-approval for your mortgage when looking to buy a presale condo. Getting a pre-approval for your mortgage is relatively easy but it puts you in a good position to close the deal. Ipresalecondos works with mortgage experts who will not only assess your needs and your finances but also get you the best rates possible.
Having a pre-approval on your mortgage tells the developer that you are not only interested in the property but are serious about it and ready to close the deal.
Tip #3: Be agreeable and responsive
In a seller’s market, the developers have the liberty to choose the buyers they want to work with. With so many buyers lined up with offers, it is important to set yourself apart from the crowd.
A good positive attitude and being agreeable goes a long way in getting yourself noticed in the competition.
It is equally important to be responsive and up to date with your timelines.
In a seller’s market, any shortfall can cause you to lose the deal.
When you work with experienced realtors like our team at ipresalecondos, we make sure you get regular updates and notifications for important deadlines like deposit payments.
When you work with experienced realtors like our team at ipresalecondos, we make sure you get regular updates and notifications for important deadlines like deposit payments.
How to tell if you’re in a buyer or a seller’s market?
If you’re on the hunt for your next presale condo, it is important to know what the market is like when and where you’re purchasing. Following are a few things to consider to check if you’re in a buyer or a seller’s market.
- You should keep an eye on recently sold properties that match your needs or are comparable to something you are looking for. If it appears they have been selling for a low price, you’re most likely in a buyer’s market. If you notice they are selling above the average mark, then you’re likely in a seller’s market.
- Look at the homes on sale currently in your preferred area. If you see a lot of listings in your area, then you’re most likely in a buyer’s market as there are many homes listed but not enough buyers to purchase them quickly. If the number of homes for sale is small and there are not a lot of homes listed, you’re most likely in a seller’s market.
- Look closely at the number of days that properties have been listed on the market for. If you see that the properties are getting scooped by fairly quickly, then you’re most likely in a seller’s market.
On the contrary, in a buyer’s market, things are not super urgent and properties stay listed for quite some time. - The price history of a listed property can also give you a good idea of the kind of market you are in currently. In a buyer’s market, it is likely that price reductions happen over time for listed properties. It is important to make sure you verify this trend with multiple properties.
Final Thoughts
Understanding the way the market works can give you an upper hand in negotiating a good deal for your next presale condo project. Be it a buyer’s market or a seller’s market, knowing the ups and downs of each can better inform you as a home-buyer.
With certain tips and knowledge under your belt, you can take control of the situation and even get great prices if you’re buying in a seller’s market.
At ipresalecondos.com Our goal is to provide you with an enjoyable and seamless experience.
To that end, we’re constantly working on improving accessibility to latest presale projects in the city of Surrey, Vancouver, Burnaby, Richmond, port coquitlam , New Westminster and the rest of the lower mainland.
If you want to learn more about what kind of market we are in currently and how to get the most out of it, get in touch with Ravi Bhindi, who has 18+ years of experience in real estate and pre-sale condos. Please call or text at 604-825-8881 or email at info@ipresalecondos.com
