Well, it depends…
Over the past five years, I believe that the majority of local real estate markets in the US would be referred to as Seller’s Markets and are now being called Buyer’s Markets.
As I have seen the term used more and more by real estate professionals, I began to wonder:
How do you define a buyer’s market and are we really in one right now?
First of all, I would categorize a Seller’s Market as having:
unusually fast marketing time
a shortage of inventory for buyers to choose from, bidding wars, etc.
sales prices closely mirroring list prices
high rate of price appreciation
improving local economic conditions
favorable financing terms available
So it would seem logical that a Buyer’s Market is just the opposite of a Seller’s Market:
unusually slow marketing time
an oversupply of inventory for buyers to choose from
sales prices arrived after larger discounts from list price
no price appreciation or price depreciation
weak local economic conditions, especially employment
unfavorable financing terms such as rising mortgage rates
But how did we flip from a Seller’s Market to a Buyer’s Market seemingly overnight and is that what you would call the market today?
While we are at it, has the market been reduced to one description or the other? Is everyone so used to the conditions from the Seller’s Market that anything else has to be a Buyer’s Market?
I have been amazed at how quickly the terminology changed. It was akin to how quickly the phrase Housing Bubble became Soft Landing, last fall.
An argument for balance_
Because all real estate is local, and I can’t speak for the rest of the country, but in New York, I contend that the overall market is currently _balanced because all the criteria of a Buyer’s Market have not been fully met.
A Balanced Market is usually a market in transition from Buyer to Seller or vice versa:
historically normal marketing times
inventory is steady
negotiability is consistent and becomes a “rule-of-thumb”
no price appreciation
flat local economic conditions, employment is stagnant
non-volatile financing trends
We seem to have all of these conditions, except for inventory. Continued inventory increases and rising mortgage rates could push the overall market into Buyer territory fairly quickly if conditions continue to erode.