Finally! The market is changing, ever so slightly but a change is happening. You kept calm and now it is time to buy a home. Everywhere you look Economists, Real Estate experts, and Brokerages are indicating that they are seeing a turn in the market. Nothing like 2008, but a slight correction. This makes sense with the increase in mortgage rates, stock market volatility, the war in Ukraine, COVID, supply chain disruption, and the fear that accompanies any one of these factors. California, however, will most likely experience less of a blip than most states as we have such a shortage in housing, but it just might be time to buy a house!
Wouldn’t it be great to have a Buyer’s market for a bit? So, what does that mean?
A buyer’s market occurs when supply exceeds demand. To put it another way, real estate inventory is high, and there are plenty of homes for sale, but there’s a shortage of interested home buyers. As I mentioned above, we are nowhere near having plenty of homes available, but buyers are moving slower than 6 months ago. These conditions give buyers leverage over sellers because when supply is higher and demand is lower, the market is forced to respond.
In a buyer’s market, real estate prices decrease, and homes linger on the market longer. So, sellers must compete with each other in order to attract potential buyers. Typically, sellers will drop their asking prices
to gain an advantage in the market. Furthermore, they are much more willing to negotiate offers to prevent buyers from walking away.
Tips for Buyers
A buyer’s market is the ideal time to purchase a new home
because prices are lower and there are fewer buyers to compete with.
Let’s say you’re interested in a three-bedroom house with an asking price of $700,000. If you find that there are a dozen similar three-bedroom homes priced at $550,000, you know the house is likely overpriced in the current market.
Pay attention to days on the market. The longer a home has been available, the more power you’ll have negotiating for a lower price. Even if you don’t ask to lower the price significantly, you can still negotiate for contingencies, seller concessions, and repairs.
Tips for Sellers
If you find yourself selling your home
during a buyer’s market, do everything you can to make yours stand out.
- Make some needed repairs. Since there are more properties for buyers to choose from, you’ll find that they can be pickier. You’ll want to do any necessary repairs before putting your home on the market and consider making minor improvements.
- Clean and depersonalize your home. Spend a lot of time considering how others will view your property. If buyers can’t envision themselves living in your home, they won’t make offers. So, do a deep clean of your home, get rid of any clutter, and touch up your landscaping in preparation. As you clean and stage your living space, try to depersonalize your space as much as possible: get rid of family photos, papers, souvenirs, and anything else that points to you living there.
- Market it like a pro. Your marketing will matter even more than it would in a neutral or seller’s market, so make sure you have stellar, professional photos taken of your property. If your home will be vacant or your decor is dated, it’s a good idea to hire a stager. With the assistance of a professional, you’ll be able to transform your rooms, so they look cohesive and polished.
- Price it competitively. It’s crucial that you ensure your home is competitive by pricing it to sell. Survey similar homes on the market to see what they’re asking. Make sure your list price is either on par with or lower than the comparable homes in your area. And when you do get an offer, make sure that you judge it fairly. Since you have less power to negotiate, you should consider offering to pay a portion of the closing costs for any repairs requested.