A buyer's market typically occurs when the supply of homes or goods exceeds the demand, giving buyers more negotiating power. In the real estate market, a buyer's market is characterized by conditions that favor buyers rather than sellers. Here are some signs that indicate you may be in a buyer's market:

1. High Inventory: There are a significant number of homes or properties available for sale in comparison to the number of active buyers. This abundance of choices gives buyers more options and room for negotiation. Currently, new TREB listings increased from July 2023 to October 2023. In addition, there is an increased number of assignments for Pre-construction homes.

2. Extended Days on Market (DOM): Homes take longer to sell, and you may notice an increase in the average number of days a property stays on the market. Sellers may become more motivated to sell as their properties linger without attracting offers. According to TREB the average listing days on market (LDOM) for a property has increased 50% from June 2023 to October 2023. The LDOM for June was 14 days and the LDOM for October was 21 days. What does this mean? It is taking, on average, longer to sell a home. In addition, the GAP between the LDOM and the PDOM or property days on market is widening from June to October. This is due to the price reductions that must be made, which will be explained in a future article.

3. Price Reductions: Sellers may need to reduce their asking prices to attract buyers in a competitive market. Multiple price reductions on listings can be a sign of a buyer's market. In a November 11 article in the Toronto Star newspaper, many homes in Toronto are not selling and thus realtors are reducing prices to create demand. Sometimes it works, sometimes it does not.

4. Fewer Bidding Wars: In a buyer's market, there is less competition among buyers for the same property. This can lead to fewer bidding wars and less pressure on buyers to make quick decisions. In today’s market buyers are placing offers with conditions.

5. More Favorable Terms for Buyers: Sellers may be more willing to offer concessions, such as covering closing costs or making repairs, to make their properties more attractive to buyers. This is especially true for the pre-construction market. There are many sellers who are giving up their deposits just to get rid of the units they cannot qualify for. Moreover, the builders are offering free parking and storage.

6. Negotiation Power for Buyers: Buyers have more negotiating power in a buyer's market. Sellers may be more willing to negotiate on price and other terms to close a deal. The crazy days are now gone! In Toronto, since October 15, 2023, some homes are selling at below or close to asking.

7. Economic Factors: Economic conditions, such as a local or national economic downturn, can contribute to a buyer's market. Job losses or economic uncertainty may reduce the number of active buyers. In Jacob Serebrin’s article in the Canadian Press, there are talks about the economy is in stagflation and this past month Scotiabank had recent layoffs. Psychologically when people see people getting laid off, they might postpone large purchases. In today’s markets, buyers are sitting on the sidelines due to the higher interest rate environment and uncertainty in where rates will go. TREB reported a 5.8% decrease in sales in October 2023. On a month to month seasonally adjusted basis, sales were also down in comparison to September. This presents a great buying opportunity as buyers will not be in too much competition with other buyers. Like the old saying says, “You buy when no one wants to buy.” Historically markets have always recovered.

It's important to note that real estate markets can vary by location, so what constitutes a buyer's market in one area may differ from another. Keeping an eye on local market trends and consulting with real estate professionals can help you determine the current conditions in your specific location. I am here to help you and more importantly, help you buy your first home.