What is a buyers market?

No matter what town you are living in or where you want to move, the home buying and selling market will be swinging toward one of two directions. Either it will be in a buyers' market or a sellers' market, or sometimes, a little of both.
Most real estate practitioners consider a typical market to be one in which homes take an average of six months to sell. REALTORS® keep track of this number by keeping up with the days on the market (DOM) of every home listed and sold. That means that in the MLS, there are likely to be at least six months worth of inventory (homes) on hand to sell for the number of buyers in the market. If the number rises above six months inventory on hand, then the market is swinging into a buyer's market. If it falls below, it is becoming a sellers market. A buyer's market is one in which there are too many homes on the market for the number of buyers. Homes take longer to sell and prices fall.
Sometimes buyers believe that winter time is a buyers' market. Although it is true that there are fewer buyers, there are usually a compensating fewer homes on the market as well. Homes offered for sale during slower times of the year are generally aggressively marketed, and may not sell for a significantly lower price than they would if they were marketed in a busier period.
In the spring, a seasonal adjustment occurs, and more homes come on the market. Buyer activity picks up as families with children (still the single largest buyer demographic) buy homes so they can move during summer vacation. A buyers' market can easily exist in the spring, if conditions dictate - that there are more homes than buyers, falling prices, and longer DOMs.
Sometimes a buyers' market can be created that lasts for a long time. The exit of one or more major employers from a community, a natural disaster such as a flood or earthquake, or some other catastrophic event can affect home values in an area for years.
Seasonal or not, any time there are more than six months' inventory on hand, there is a glut of homes on the market. Whenever there is a surplus of homes, and prices begin to drop, sellers will work harder to attract buyers, including adding incentives such as owner-financing or a large "redecorating allowance."
As homes become more competitive, buyers realize that their interest is at a premium and they will increase their demands to sellers. Those nice chandeliers that normally would not be included in the purchase price of the home, now become a bargaining chip for the buyer. The buyer may ask the seller to provide a home warranty at the seller's expense, or for the seller to pay more of the closing costs than usual out of the settlement proceeds, or any number of other contingencies.
People who have occupied their homes for many years may be able to sell their homes at a profit in a buyer's market because they have built equity, but they will find that if they have performed little or no improvements the home will compare even more poorly with the glut of homes on the market and it will command bottom dollar.
Sellers who are in a must-sell position may take little or no profit from the sale of their homes, or may even be forced to take a loss. The homeowners who are most hurt by a buyer's market are those with little or no equity built into the home. If they are forced to sell, they may have to come to the closing table with cash to pay their mortgage off or allow the home to be repossessed by the lender.
The one certainty that can always be counted upon is that one side of the market will never stay on top forever. In fact, it can turn on a dime. The same area that remains depressed for a period of time can make a comeback as lower prices stimulate reinvestment.

The local market now--- Prudential Carolina Real Estate

To our friends and neighbors,
Recent changes in the real estate market have made local and national headlines for well over a
year now. As we do from time to time, we wanted to share with you our perspective about what’s
happening locally and how it might impact you if you’re a buyer or a seller in today’s market.
The “seller’s market” of two years ago, with few homes for sale, rapid appreciation, decreasing
affordability and high buyer frustration, has been replaced with the “buyer’s market” of today. Although
there is strong buyer activity, with a record breaking 11,000 homes for sale, there is simply too much
inventory for all of it to be absorbed. The market will settle somewhere in the middle with a healthy
balance between buyers and sellers. This adjustment feels unsettling but is necessary and will insure the
long term health of real estate.
What does that mean to you if you’re active in today’s Charleston real estate market?
If you’re a seller, you may find that you have more competition than in the past. You need to
work with your real estate professional to understand your specific market area and the homes that you
are competing against. Most importantly, you need to price your property competitively so that your
home is one that buyers will want to see. Be assured, if you are motivated and have a need to sell, you
can be successful.
If you’re a buyer, today is the best opportunity we have seen in recent history. Interest rates are
low and there are many homes to choose from. Real estate is a sound long term investment and
mortgage interest and property taxes are often tax deductible. If you’re thinking about buying your first
home or moving up to another home, don’t miss this opportunity.
At Prudential Carolina Real Estate we are optimistic and confident about the future of real estate
in Charleston. All of the key factors that contribute to a healthy real estate market are in place. Interest
rates and unemployment are predicted to remain low, demographics are strong and our local economy
continues to grow, driven by the many reasons that make Metro Charleston such a desirable place to
live.
For updates on the latest market statistics visit our website at www.prudenitalcarolina.com. If
you need guidance about your real estate needs, or if you just want more information, please contact a
Prudential Carolina Real Estate sales associate. It would be our privilege to help.
Grange Cuthbert Patty Scarafile Michael O’Shaughnessy
Vice Chairman CEO and President Chairman