What Does a “Buyer’s Market” Really Mean?

As many people can tall you, we are in the midst of a Buyer’s Market.  In general, this means that Buyers rather than the Sellers of homes will have an easier time making the transition into their new home.  Buyers are better able to negotiate terms that are more the their liking and prices of home are declining to meet decreased demand for homes.

There is also a statistical or mathematical evaluation of whether we are in a Buyer’s Market or Seller’s Market called The Absorption Rate. In simple terms, this is the rate at which homes are actually sold and how long it might take to sell them.  If there is six months or less of housing inventory sitting on the market we are considered to be in a Seller’s Market.  Anything over six months – a Buyer’s Market.

What this Means for the Buyers in the MD Suburbs of DC

Currently, there are pockets of the MD Suburbs of DC that are still in Seller’s Market mode.  Yes, prices have come down but because of the location relative to schools, METRO, desirable shopping venues, and traffic corridors houses in these “pockets still get sold pretty quickly and pretty near full price.

There are other areas in which Sellers are more than willing to negotiate very favorable terms for the Buyer.  The catch is that the Seller has certain needs of their own.  They cannot and will not sell their homes for ridiculously low offers or at terms where they feel like they’re “giving the house away”.  It just isn’t going to happen.

So, Buyers need to be aware that, yes, they will get very favorable terms but they cannot demand “half off” or “a third off” the asking price. And this is true only if you’re dealing with a Seller who has actual equity in their home and can legitimately negotiate the terms.  If Buyers are looking for “deals” with the vast number of “short” sales and foreclosures in the area, you may be unpleasantly surprised.  The banks and mortgage companies that need to approve the sale are already taking a big hit.  They don’t just roll over and give potential Buyers what they might want.

But, I digress.  Short sales and foreclosures are a whole other mess…and something I may write about another day.

About Ken Montville

Ken Montville is a Realtor® and Associate Broker with RE/MAX United Real Estate in the beautiful Maryland Suburbs of Washington, DC. He has been selling nice homes since 1999. Way back in the 20th Century.

When Ken Is not doing the real estate thing he can be found all over social media in places too numerous to mention and he listens to jazz, reads a little (mostly non-fiction), hangs out with the Rotary Club of College Park, MD and can be found blogging at MDSuburbanHomes.com