Buyers’ market vs. sellers' market: what you need to know

If you look at real estate news at all, you’ve probably heard the terms buyers’ market and sellers’ market being used – but what do those terms actually mean?

A buyers' market happens when there are more properties for sale than there are interested buyers. Essentially, it’s when supply exceeds demand. 

In general, there's less competition, prices drop, properties stay on the market longer, buyers can add conditions to their offers without scaring away sellers, and sellers have to do a lot more in the way of marketing, staging, etc. to attract buyers – and be willing to negotiate to make a sale happen. 

Typically, in a buyers’ market you’ll see: 

• More properties for sale

• Lower prices

• More offers at or under asking

• Fewer offers overall

• Offers being accepted anytime rather than reserving offer dates

• Offers that have conditions

• Properties take longer to sell

A sellers' market is the exact opposite. Also known as a “hot” market, it’s when there are more buyers than available properties, and buyers have to compete for what is available. In this kind of market, properties sell faster, for higher prices, and buyers have to be willing to do more (foregoing conditions, agreeing to shorter closing dates, offering more money, and accepting properties “as is”) to beat out other bidders. 

There’s less opportunity for buyers to negotiate: the sellers are in control. And if that sounds familiar, it’s because it’s the kind of market Toronto and the GTA were in for a long time, while interest rates were low. But when the Bank of Canada started raising rates, that cooled down the hot market pretty fast. 

Things you’ll see in a sellers’ market 

• Fewer available listings

• Higher prices

• Offer dates

• Bidding wars/multiple-offer situations

• Sellers turning down offers at (or even above) their asking price

• Buyer frustration

Here’s how the type of market can impact you when you buy or sell

• Are you a buyer in a buyers' market? You’ll face less competition and less pressure and have more selection. Remember, however, that while we’re currently in a market that favours buyers, it isn’t a traditional buyers’ market because there’s still a lack of inventory – as prices have dropped, many sellers have stepped back. 

Ready to see what’s out there? Start your search by signing up at condos.ca or property.ca today. 

• Are you a seller in a buyers' market? Great staging and marketing are a must to get attention for your listings. And you’ll probably have to adjust your expectations about what you can get for your property. Be open to reasonable offers and work with an agent who will tell you what’s realistic. 

Looking for a great agent to help you sell your home? Get in touch and we’ll connect you with a neighbourhood pro with a solid strategy for this market. 

• Are you a buyer in a sellers' market? Jump on listings fast because they’ll get snapped up by other buyers. Expect to compete with multiple offers, and come up with creative ways to encourage sellers to pick you over other bidders. Luckily for buyers, this kind of frenzied situation has cooled – though that’s not to say it can’t still get competitive out there, particularly if a special property comes on the market. 

• Are you a seller in a sellers' market? It’s a great position to be in: a good sales strategy will likely net you a great selling price without conditions.

WHERE you’re buying or selling can make a big difference 

One thing to remember is that markets can differ dramatically by neighbourhood. You can have a particularly in-demand pocket that stays firmly in sellers’ market territory, even when the areas around it are better for buyers. The GTA isn’t a single homogenous market, so it’s best to work with an agent who’s knowledgeable about the nuances of different parts of the city. 

Ready to start your search? Jump in by signing up at condos.ca or property.ca!