There has been a lot of talk recently about the real estate bubble that has burst in the United States. Remember when not too long ago, houses suddenly skyrocketed in price? In coveted areas, homes that could hardly be given away in the past suddenly became hot property, inciting bidding wars. When a situation like this occurs, when there are not enough houses for a period of six months or more to compete with the public demands, in real estate it's known as a seller's market.
Although the industry varies in different areas, it seems as if the tides might be changing and buyer's markets are finally emerging again. A buyer's market is exactly the opposite of a seller's. It's when there is a surplus of houses for sale, which will work in your favor if you are buying a new home.
A housing surplus means more choices at lower prices and eases the pressure off of the buyer into rushing into making such an important purchase. Houses tend to stay available longer, causing sellers and agents to gradually lower the price in order to entice buyers. Although it's an ideal situation for those looking to buy, sellers, especially those looking to unload property quickly, stand to lose significant amounts on their investment. Buying pattern shifts are due to a variety of circumstances. Local economy changes, natural disasters, and just plain old luck will all affect the state of the local housing industry. This makes real estate a volatile environment. One day houses for sale will be collecting dust, the next they may become flooded with bids. So even though a buyer's market is initially a boon, it can soon turn into a nightmare if you aren't careful and make wise decisions on your housing search. When buying a house, regardless of the current trends, make a budget and stick with it. Also, this is going to be where you go home to every day, so while you need to be flexible and make some compromises, know what features are absolute necessities for you. As you begin house hunting in a buyer's market, you probably will have more options and leisure time to browse, but if you find your dream home, it's best not to hesitate on making an offer.
Waiting for further price slashes is usually not a safe bet as the local selling trends can change quickly, and a good deal, regardless of housing trends, is a good deal. Other people will undoubtedly feel the same way and might snap up your dream home before you realize it. When shopping in a buyer's market, use the tools available to you. The internet and word of mouth can aid you in your search for the perfect home, but an experienced real estate agent is your most valuable resource.
Remember that real estate is a business of bargaining. You're not expected to pay the sticker price. In a buyer's market, there is always room to negotiate. The sooner you make an offer, the sooner a seller might be willing to lower the price. No matter how favorable the market is for you, the only way to capitalize on it is to do your research and to use a local real estate agent.
Searching for the right home in the perfect place? Chances are you'll want to check here first.
Gary Allalouf- RA
Hawaii Realty International
Hawaii Mortgage Basics