Every real estate market is cyclical, with the US real estate market following 18.6-year cycles over the last two centuries. That means that even the longest seller’s or buyer’s market is bound to end as the demand, price, and supply change.

That the pandemic has been exceptionally good to home sellers is no secret. Pent-up demand has sent home prices skyrocketing, with the median home price hitting a record $350,000 in May 2021.

But when will it be a buyers market once again? It’s the top question on the minds of people aspiring to invest in homes across the country. This blog sheds more light on this matter.

First Things First: What Is a Buyer’s Market?

real estate market

A real estate buyers market is a market where the inventory of homes on the market surpasses the number of interested buyers. As a result, buyers gain the upper hand in the transaction.

Homeowners listing their houses in a buyer’s market go the extra mile to make their properties as attractive to buyers as possible. As a buyer, you should have no problem finding a house with perfect vertical grab bar placement, if this feature is top on your list.

Home sellers in a buyer’s market tend to offer the most attractive terms possible to entice buyers.

Signs of a Buyer’s Market

sell as-is

Today’s real estate market factors home sellers. But as we pointed out earlier, this won’t last forever. Look out for the following signs to know when the market starts to shift in favor of home buyers.

1. Homes Stay Longer on the Market

The amount of time that passes between a home’s listing and its sale is a great indicator of demand. If homes are flying off the market, then you’re looking at a seller’s market. Once demand starts weakening, homes stay on the market longer.

This is what’s happening at the moment. A year ago, homes were getting snatched up within days. Now homes are sitting on the market for 20 to 30 days, which means that the seller’s market is on its way out.

2. Home Prices Appreciate at a Lower Rate

Home prices typically reflect the relationship between demand and supply. In a seller’s market, prices tend to go up. For instance, home prices were up 24 percent in May this year compared to a similar time the previous year.

In a buyer’s market, prices tend to remain flat or trend down. Even if they do increase, the rate is generally lower than the 3 percent rate per annum that’s expected for residential real estate.

3. Home Inventory Exceeds Demand

Pros of Building a Home

The current home shortage is a clear indicator that we’re still in a seller’s market. As inventories start to rise, the market will once again start to shift in favor of buyers.

At the moment, bidding wars are already lessening. Sure, the available inventory is still not enough to meet demand, but things will continue to change in the future, with more homes being available for buyers.

When Will It Be a Buyers Market? Now You Know

Hopefully, you now have an answer to your question: when will it be a buyers market? As you’ve seen, it’s easy to tell when things start to turn in the favor of buyers. Knowing how to recognize the signs can help you prepare to take advantage of the market changes.

Would you like to read more great content like this? Keep visiting our blog.

You May Also Like