What is it?
A buyer’s market is a colloquial phrase referring to a time when the housing market is weak, and therefore housing prices are low. This makes it easy for buyers to pick up properties, but it’s also a time when not as many people are out there buying
What causes it?
Generally the housing market reflects the state of the economy. If the economy is bad, people are often losing their jobs and having trouble paying their mortgages. For most people, this isn’t a good time to buy a home unless you have job security and can afford to take the risk. Economic downtowns devalue homes, which leaves many home owner’s upside down on their mortgages (meaning they owe more on the home than what its worth). Because of this, many homeowners don’t sell and choose to hold onto the home, hoping the market turns around and they recover their investment. During a buyer’s market, the only people usually selling are those that simply don’t have a choice.
How to benefit?
If money isn’t a major issue for you, then a buyer’s market is the time for you to snag some real estate. You will get a good deal on homes that may normally cost significantly more, but you may also find yourself looking at a lot of foreclosures or short sales. Either way, if you can afford the risk of buying in a weak market, then you need to get while the getting is good. As well, if you aren’t particularly wealthy but have a secure job and a healthy savings account, this is a great chance to become a first time homeowner.