The real estate market is constantly changing. Knowing what is going on in your local real estate market will help you understand how these conditions can affect the sale or purchase of your home. When you meet with your agent, ask about the current state of the market.

1. Buyers' Market: The supply of homes on the market exceeds demand.

Characteristics: High inventory of homes. Few buyers compared to availability. Homes usually stay on the market longer. Prices are stable or perhaps dropping.

Hence: Buyers spend more time looking for a home, and when they negotiate, they usually have more leverage.

2. Sellers' Market: The number of potential buyers exceeds the supply of homes on the market.

Characteristics: There is a smaller number of homes with many buyers. Homes sell quickly. Prices usually increase and you may often see a bidding war.

Hence: Prices may be higher or perhaps climbing. Buying decisions must be made quickly. Conditional offers may be rejected.

3. Balanced Market: The number of homes on the market is roughly equal to the demand.

Characteristics: Demand equals supply. Sellers accept reasonable offers. Homes sell within a reasonable time period. Prices generally remain stable.

 

Article courtesy of TREB www.torontorealestateboard.com