Understanding a Buyer’s Market

The real estate market is always shifting, and one of the most significant dynamics is the difference between a buyer’s market and a seller’s market. Right now, in many regions, conditions are leaning toward a buyer’s market – where supply outpaces demand, giving buyers more options and bargaining power. Whether you’re planning to buy, sell, or just preparing for your next move, understanding this type of market can help you make smart decisions.

What is a Buyer’s Market?

Essentially, a buyer’s market occurs when there are more homes available than there are buyers looking. Statistically, this is typically described as greater than 5 or 6 months of inventory. To calculate this, we simply take the total number of active listings and divide by the number of sales in the last month. Depending on who you ask, some may say a buyer’s market exists with greater than 5 months of inventory, while some peg a buyer’s market at 6 months of inventory or greater. Either way, once inventory levels get into this range, market conditions will favour buyers. You’ll see homes staying on the market longer and sellers eager to get their homes sold often consider price reductions. Ultimately, buyers tend to have more leverage when negotiating.

In contrast, a seller’s market is driven by limited inventory and high demand, often sparking bidding wars and quick sales, sometimes with few, if any, conditions. Recognizing which type of market you’re in is key to your strategy.

Opportunities for Buyers

If you’re in the market to purchase a home, a buyer’s market is full of advantages:

• More Selection – With more listings available, you may have more time to find the home that best fits your needs.
• Stronger Negotiating Power – From price reductions to including multiple conditions and asking for certain repairs to be completed by the seller, buyers often have the upper hand.
• Potential for Better Value – Sellers may be more willing to compromise to close a deal, which can lead to better purchase terms.
• Less Pressure – Unlike a competitive seller’s market, buyers don’t usually have to rush into decisions about making an offer the day a home is listed.

Managing Expectations as a Seller

Selling in a buyer’s market can be challenging, but it’s certainly not impossible – homes are still selling every day. The key is aligning expectations and strategy:

• Price Realistically – Overpricing in a buyer’s market can (and probably will) backfire, leaving your home to linger on the market.
• Invest in Presentation – Staging, professional photos and video, repairs, and minor updates can make your property stand out.
• Be Flexible – Be open to negotiations on price, closing date, or inclusions.
• Think About Price Differential, Not Just Price – What usually matters most is the difference in price between the house you sell and the one you buy. By timing your purchase and sale as closely together as possible, you’ll minimize the potential for market changes that could increase this differential. To best achieve this, the home you have to sell needs to be ready to list when the time is right.
• Work With Market Trends – A knowledgeable real estate professional can help you understand buyer behavior and market conditions, position and present your home effectively, and price it correctly.

Be Ready – Buyer or Seller

Even if you’re not immediately entering the market, preparation is key.

• For Buyers: Get pre-approved, know your budget, know the current market conditions (your real estate professional will guide you), and have a clear picture of your must-haves versus nice-to-haves. This way, when the right property comes along, you can act quickly and confidently.
• For Sellers: Keep your home in good condition, start decluttering, complete necessary repairs, track market activity in your neighbourhood with the help of your real estate professional, and have a plan in place so you’re ready if you decide to list.

The Bottom Line

A buyer’s market brings both challenges and opportunities. Buyers can secure good deals with less competition, while sellers must adjust strategies to attract attention and meet buyer expectations. The good news? Whether you’re buying, selling, or preparing to do either, understanding the market climate ensures you’re in the best possible position to succeed.

Get In Touch

As your trusted resource for all things real estate, I’d be more than happy to provide you with additional insight on how to best prepare for buying or selling real estate. If you have any questions about the market, please reach out anytime. Want a better real estate experience?
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