Buyers Market vs. Seller Market: What's the Difference?
30th January 2023
30th January 2023
A buyers market describes an economic situation in which goods are plentiful, buyers have many options and prices are low because of excess supply relative to demand. A sellers market describes an economic situation where goods are scarce, the number of buyers is relatively few, and prices are high because demand exceeds supply. However, the difference between buyers markets and seller markets is not as straightforward as it may initially seem.
In a buyer’s market, real estate is more affordable because supply exceeds demand. This means there are more homes on the market than there are buyers – putting downward pressure on prices.
In a buyer’s market, properties not only tend to sell for less, but they also tend to stay on the market longer before an offer is made. Less interest from buyers means vendors need to price their properties more competitively to sell within a reasonable timeframe.
Although a buyer’s market typically means properties are cheaper to buy, they also might not offer much growth potential in the short term if the market is continuing on a downward trajectory.
A seller’s market is the opposite of a buyer’s market in that demand exceeds supply, meaning vendors can usually sell their properties quickly and at a favourable price.
In a seller’s market, time on market tends to be low, while median home and unit prices are high. Under these conditions, vendors are less likely to budge on price simply because they have more negotiating power.
It’s also not uncommon for properties to sell above their list price in a seller’s market as buyers compete for the hottest commodities.
In most cases, property markets aren’t strictly favourable to buyers or sellers but rather a combination of both. For example, most UK cities have suburbs where demand is greater than supply and vice versa, creating pockets of both buyer’s markets and seller’s markets.
In an ideal world, you would be able to sell during a seller’s market when property prices are at a peak and buyer demand is high. But there are a number of reasons why you might need to sell in a slow market, such as a change in family circumstances or because you’re moving to a different area. In any case, there are still things you can do to help secure the best price and sell within a reasonable timeframe, even in a buyer’s market:
Cast a wide net – Instead of waiting for prospective buyers to come to you, you’ll need to get in front of as many eyeballs as possible to improve your chances of selling. In addition to listing your property on the usual platforms, talk to your estate agent about marketing your property on places like social media and other community platforms to give it as much visibility as possible.
Have your home professionally staged – If you’re planning to sell your home, professional home staging can go a long way to getting you the maximum sale price. It helps accentuate the space and gives prospective buyers a view of your home as an attractive, modern space with plenty of lifestyle appeal.
Be flexible – You’ll want to take advantage of any potential opportunities that pop up, and that means being flexible and ready for inspections at any time. Keep on top of those little chores so your home is at least largely presentable for any prospective buyer who wants to make a last-minute viewing, as it takes only one to make the sale.
Consider incentives – Buyers are more likely to ask for incentives in a buyer’s market, so consider offering a couple of incentives upfront. This could be anything from throwing in the dishwasher and fridge with the property to offering to pay council rates for the first few months after the sale. Think about what you can do to sweeten the deal and get an edge over comparable properties in the area.
Choose a trusted estate agent – Don’t just go with the most recognisable estate agents by default. Make sure to do your research and ask the right questions when evaluating estate agents so you can be confident the person you choose has an in-depth knowledge of your market and a solid track record.