Monday, May 13, 2019 / by Robyn Burley
"The real estate market is in a constant state of flux"
It is always changing and adapting to the supply and demand in the market.
So when it's time for you to move, do you...
The way we figure this out is by first understanding what kind of market we are entering in to and building a strategy around it.
So how do you know what kind of real estate market you are entering and what does this mean to your buy or sell first strategy?
There are 3 types of real estate markets:
→ Buyers Market
→ Sellers Market
→ Balanced Market
1. Identifying a 'Buyers Market'
If you are a buyer looking to a purchase home in a buyer's real estate market, this is the best financial market for you to buy in… but why?
It is because there are more homes available for sale than there are buyers to purchase them.
In a buyers market, sellers are often more motivated to negotiate in order to make the sale.
This means you can probably buy a home for less than it was advertised for.
→ Signs to identify a Buyers Market:
1. There are more homes on the market now than previous months
2. Homes are not selling quickly (across all price ranges)
3. Average listing price has decreased month by month
2. Identifying a 'Sellers Market'
If you are a homeowner who wants to sell a house in a seller's market, this is the best financial market in which to sell… but why?
It is because there are more buyers looking for homes than there are homes available on the market.
This means you can probably sell your home quickly and for more than you asked for it!
→ Signs of a Seller's Market
1. There are less homes on the market now than previous months.
2. Homes are selling quickly (across all price ranges).
3. Average sale price has increased month by month.
3. Identifying a 'Balanced Market'
In the last decade, we have not really experienced balanced markets in most of Southern Ontario.
In a balanced market, the scales don't tip in either direction, meaning the market is normal without experiencing volatile swings.
This means you can buy OR sell first and this decision should depend on your own goals, financial situation and timeline.
→ Signs of a Balanced Market
1. There are the same amount of homes on the market as previous months.
2. Homes are selling at an average pace (across all price ranges).
3. Average sale price has plateaued month by month.
**The kind of market you are entering into can be different depending on the price range of the home you are interested in buying or selling
So how do you decide whether to buy or sell first?
You can use the current state of the market to help guide you through your decision. If it is a Sellers Market (similar to our current market), it may be wise to purchase a home first because there is more competition out there for buyers. HOWEVER, although the market can help guide your decisions, there is no right or wrong answer for what you decide to do first (i.e. perhaps you need the money from the sale of your home to help with your down-payment and thus need to sell before you buy).
Ultimately, it comes down to your comfort level, financial situation and timeline.
If you want to know more about what our current market is doing in Kitchener-Waterloo-Cambridge-Guelph, check out our post on Facebook!
If you want more information about the current state of your market, please reach out!
We are here and happy to help guide you through the winding roads of today's real estate market!