What is a "Buyer's Market?"
April 28, 2010
Recently I had a prospective buyer of a home who had thus far put in several offers on newly listed properties and not be the successful offerer remark, "I thought this was a buyer's market."
If by a "buyer's market" one thinks that there are more houses than buyers and that buyers can name their price, that is not this market. Perhaps a buyer's market would be when sellers are willing to negotiate with a buyer and the buyer is able to purchase properties substantially under the list price.
The reality of this market is that it has more the characteristics of a "seller's market" in that there seems to be more demand than supply. However, prices do not seem to be having the upward pressure that one might expect in a "seller's market".
I suggest a couple of reasons: There is still much fear in prospective home buyers that prices will continue to fall. Much of the present inventory is made up of "short sales" where the listed price is less than what is owed and until a lender/investor agrees to take the loss, they remain unsold, and I might add, not popular with buyers because of the uncertainty of whether an offer will be accepted or not. Also the lender decides whether the price a buyer offers is acceptable and may counter a higher price. The lender, not the buyer, is in charge. Since the short sale may be offered by the owner at a very competitive market price, there can often be multiple offers.
Tune in as the government's tax credits expire to see if the buyers still looking to find a home keep the competition for the well priced, well located, good condition homes moving.
Presently, it seems that lenders are still in charge of this real estate market.
Recently I had a prospective buyer of a home who had thus far put in several offers on newly listed properties and not be the successful offerer remark, "I thought this was a buyer's market."
If by a "buyer's market" one thinks that there are more houses than buyers and that buyers can name their price, that is not this market. Perhaps a buyer's market would be when sellers are willing to negotiate with a buyer and the buyer is able to purchase properties substantially under the list price.
The reality of this market is that it has more the characteristics of a "seller's market" in that there seems to be more demand than supply. However, prices do not seem to be having the upward pressure that one might expect in a "seller's market".
I suggest a couple of reasons: There is still much fear in prospective home buyers that prices will continue to fall. Much of the present inventory is made up of "short sales" where the listed price is less than what is owed and until a lender/investor agrees to take the loss, they remain unsold, and I might add, not popular with buyers because of the uncertainty of whether an offer will be accepted or not. Also the lender decides whether the price a buyer offers is acceptable and may counter a higher price. The lender, not the buyer, is in charge. Since the short sale may be offered by the owner at a very competitive market price, there can often be multiple offers.
Tune in as the government's tax credits expire to see if the buyers still looking to find a home keep the competition for the well priced, well located, good condition homes moving.
Presently, it seems that lenders are still in charge of this real estate market.
posted by shirley harry at 5:32 AM
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