Dealing with the changing housing inventory
What is a Buyer's Market? How does it differ from a Seller's Market?
Buyer's Market
When there are lots of properties on the market at the same time, the buyer has lots of choices and therefore often has the upper hand in negotiations. He can always go buy another house if any particular house doesn't pan out.
Seller's Market
When there are very few properties for sale at any one time, the buyer often has to settle for terms or even a home that are not what he really wanted. There just are not many choices. In this case the seller often has the advantage, because there are more buyers than properties.
Balanced Market
Most of the time, there enough homes on the market and buyers looking for homes that neither has much of an advantage.
The nature of the real estate market is that the pendulum swings. During the "recession" of the early nineties, it was a Buyer's Market. The economy was poor and consumer confidence was low. During the late nineties, the economy and consumer confidence turned quickly and it fast became a Seller's Market. As soon as the pent-up demand (actually stored indecision) was satisfied, it became a Balanced Market.
When you are a buyer, you must consider what kind of market you are operating in, and change your strategy accordingly.
