Understanding market conditions

The real estate market is always changing, and it helps to understand how market conditions can affect your position as a buyer. Your agent can provide you with info on current conditions and explain their impact on you.

Buyers' market
The supply of homes on the market exceeds demand.

Characteristics

• High inventory of homes
• Few buyers compared to availability
• Homes on the market longer
• Prices tend to drop

Implications

• More time to look for a home
• More negotiating leverage

Sellers' market
The number of buyers wanting homes exceeds the supply of homes on the market.

Characteristics

• Smaller inventory of homes
• Many buyers
• Homes sell quickly
• Prices usually increase

Implications

• May have to pay more
• Must make decisions quickly
• Conditional offers may be rejected

Balanced market
The number of homes on the market is equal to the number of buyers.

Characteristics

• Sellers accept reasonable offers
• Homes sell within an acceptable time period
• Prices generally stable

Implications

• More relaxed atmosphere
• Reasonable number of homes to choose from