Unlike a Sellers Market, a Buyers Market is when there are more people trying to sell homes than buyers available to purchase them. In most cases this causes housing prices to cool off and in some cases even drop lower and lower depending on how long the buyers market lasts for.
Causes for a buyers market include, but are not limited to,
- Over supply of houses or boom in new development
- Slow economic growth with steepening unemployment rate
- Bubble in housing prices which reduces overall affordability
- High interest rates or mortgage regulation changes
A buyers market does not always mean that a buyer will get a better deal on property. At times when home prices are too high, a buyers market can continue to show larger affordability problems in the local real estate market until prices or other regulations change to force the price of housing back to an affordable level.
For investors working with a good broker this can be the perfect time to get a great real estate deal - Sellers who have been on the market for some time will be more inclined to negotiate a lower price and at times accept a loss to finalize the sale of their property.