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 in downtown Toronto to be one in which homes take an average 60 days 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 two months worth of inventory (homes) on hand to sell for the number of buyers in the market. If the number rises above two months inventory on hand, then the market is swinging into a buyer's market. If it falls below, it is becoming a seller's 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.

Read here why a downturn is the best time to buy up!