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The Pros and Cons of a Buyer’s Market


There’s a lot of chatter on tv and online about it being a buyer’s market. But what does that really mean for today’s buyers and sellers?

What is a buyer’s market?

Simply put, a buyer’s market is when there are more homes for sale than there are buyers. We determine if the real estate market is balanced, in favour of buyers, or in favour of sellers by looking at the absorption rate – which shows us how many months the market could be sustained if no new houses were added to the inventory. Absorption rate is calculated by dividing the total number of sales in a given month by the number of listings available.

In Calgary and its surrounding area, 2.0-4.0 months of inventory is considered to be balanced, while below that is considered to be a seller’s market. (In Red Deer, a balanced market is 2.5-4.0.) Absorption rates exceeding 4 months of inventory moves us into a buyer’s market – like we are seeing today.

Is it a good time to buy?

The “right” time to buy or sell completely depends on your personal circumstances and goals. If you’re a buyer, you have lots of inventory to choose from and more power to negotiate your price and terms.

But you also need to take into consideration your personal finances, ability to qualify for a mortgage (new mortgage rules have increased the qualifying rate for most borrowers), and if you’re already a homeowner, your ability to carry two mortgages while waiting for your current home to sell (although you can also make an offer on a home that is subject to the sale of your home – your CIR Realtor can help you negotiate this in your contract!).

Is it a good time to sell?

As a seller that is also buying a home, you get to take advantage of the buyer’s market conditions too, so you also have more inventory to look at and room to negotiate your purchase price. But deciding if it’s a good time to sell depends on many factors – why do you want to move? Is there finally a home for sale in your desired neighbourhood? Will you make or lose money on your current home? Can you afford to move?

While you’ll hopefully snag a deal on your new house, selling your home in a buyer’s market may take some work. You’ll need to be competitive with your marketing. Don’t overprice your home and know that its showing condition (onsite and online) will leave an impression on prospective buyers. Little things will matter more – so consider decluttering, deep cleaning, staging, and professional photography to help sell your home faster. Your CIR Realtor will be able to assist you with all of these things and set up a marketing plan to get your home the exposure it needs to sell in a tough market.

Written by CIR REALTY

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