Understanding Market Conditions

Understanding the real estate market that you are buying into is critical. The real estate market is largely driven by a concept known as supply and demand and, depending on current conditions, can create advantages or disadvantages to the buyer. To take best advantage of current conditions, you need to understand them. 

Buyer’s Market

In a buyer’s market, the supply of homes is greater than the demand. From a buyer’s perspective, this creates many advantages. Not only will you have a large inventory of homes to choose from and more time to find your dream home, but there will be less competition. This greatly increases your negotiating leverage. In a buyer’s market, homes will generally take longer to sell and may go through several downward price adjustments, allowing you to purchase your home at a substantially reduced price.

Seller’s Market

In a seller’s market, the demand for homes is greater than the supply of homes on the market. There are many buyers competing for a small inventory of homes. In this market, your negotiating power is diminished. Not only will you have a small inventory of homes to choose from and a reduced time to make your decision, you may find yourself in a competitive bidding situation where you will have to pay more for the home. You will also have to consider the conditions on your Offer to Purchase carefully as the seller may choose to sell the home to another buyer without conditions. 

The information contained herein is accurate at time of printing and is copyright Bruce Witchel 2015.
For further information on real estate matters, please contact Bruce at 416-WITCHEL 416-948-2435 or by email at Bruce @ BruceWitchel.com.
Bruce Witchel, Real Estate Agent
Mississauga, ON,
(416) 948-2435