Understanding Market Conditions

How Supply and Demand Influence the Housing Market

The concept of supply and demand is a simple one, but it is important in understanding how housing market conditions affect price, and your buying strategy. When there are more homes for sale than there are potential buyers, house prices decrease. When there are less houses on the market than there are buyers, house prices will increase. When the number of homes on the market is roughly equal to the number of buyers, it's called a balanced market.

Market conditions can vary widely across the country, provinces and even neighbourhoods. The demand for housing in any particular area can be influenced by a variety of factors. Economic conditions (both national and local), the availability of property (supply), and the unpredictability of consumer trends can determine if a certain neighbourhood is hot or not.

As experts on your local real estate market, Top Guns Realty Inc.'s professional Realtors are an excellent place to start understanding the state of your local market. You can also view the Canadian Mortgage and Housing Corporation (CMHC) Housing Market Information for housing market updates and forecasts.

Buyer's Market

A buyer's market is the ideal situation for any house hunter. Home sellers have more competition, and homes often stay on the market longer. This puts buyers at an advantage and gives you more negotiating power. In general you can expect to pay less for more house, have more time to make a decision, and have conditional offers to be accepted quicker than in a seller's housing market.

Seller's market

Your position as a buyer is a little more complex in a seller's market. There are fewer homes to choose from, so competition between buyers becomes a factor. This can lead to bidding wars that drive prices upward. You have to be ready to act fast in a seller's market as houses usually sell quick. With buyers outnumbering sellers, you will soon learn to grab a good deal when you see one, or lose out. You may have to settle for a little less extras, too. Conditional offers that may have included appliances or extra repairs in a buyer's market could very well be rejected in the seller's market.

Balanced market

Buying in a balanced market is much more predictable. With the supply of sellers and demand of buyers in equal numbers, housing prices stabilize and the atmosphere on both sides of the transaction becomes more relaxed. Reasonable offers get accepted causing houses to sell in an average amount of time.

830 Rowntree Dairy Rd. #17 . Woodbridge . ON . L4L 5V3 Phone. 416.749.8486  Fax. 905.850.5525

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