When people talk about “the Housing Market,” it’s like talking about America – there’s a lot of diversity that is difficult to tie up into a neat little package. Every market is different, and part of being a successful home buyer or seller is figuring out the specifics of your market and using them to your best advantage.
Buyers in big markets, from the quintessential ‘big city’ to the super-suburban sprawl to other areas with a lot of homes and a lot of action, have a unique set of challenges.
A big city market quickly becomes a “buyer’s market” when competition is slow. Caused by a glut of homes for sale or a lack of buyers, these slow, overloaded housing markets give buyers the greatest advantages. Buyers in big slow markets have all the cards. There are “many fish in the sea,” and every seller knows it! With so many homes on the market, buyers can really shop their options to find the best homes, best neighborhoods, best values, and best deals to suit their needs and budgets. Slow markets can force sellers to cut prices, invest in upgrades, provide perks, and accept offers they wouldn’t prefer to, just to get their home sold.
In big slow markets, buyers can indulge in some pushy behavior; this can mean a lot of things. One method is shopping listings above your preferred price range any negotiating lower prices. Another is looking for ‘steals’ and offering for even more rock-bottom prices for a super-affordable home. A common and popular push is to get the sellers to finance closing costs, leaving the buyers’ cash-at-hand free for desired upgrades and move-in expenses. Another common push is to ask for detailed or specific repairs and upgrades from the seller, paint and carpet allowances, or other seller actions that minimize the buyer’s to-do list and making the home move-in ready to the buyer’s preference.
Another advantageous aspect of a big slow market is time. When home sales are slow, buyers can be slow too. This means really taking their time to play the field, look around, compare properties, and wait for just the right home to show up. Buyers can also draw out negotiations with less fear of competition, wrangling for every single concession they can get. Sellers often can’t afford to be slow: pressures from job relocations, finances, and other needs can force them to weigh the cost of giving up a concession verses paying another month’s mortgage and maintenance, or losing the buyer and paying them even longer. This is ideal for picky buyers – buyers who don’t want to invest much personal effort or funds into making an imperfect home more suitable, they just want to find the perfect home from the start. With the luxury of time and abundance of choice, buyers can afford to be picky and still get what they want on their own terms and timeline.
A final advantage to big, slow markets is buyer’s incentives. Many big cities actively work to speed up their slow markets by offering incentives for potential homebuyers to buy homes. These can range from tax breaks to financing assistance. Urban renewal projects entice buyers back into depleted areas with improved amenities such as parks and sidewalks. Even ‘good’ neighborhoods hit by the housing crash and economic woes can be eligible; suburbs have been as hard hit as inner cities. Abandoned and foreclosed homes are auctioned off for pennies on the dollar to homeowners willing to fix them up, and empty lots given away cheap to buyers looking to build or neighbors planning to expand and improve their own properties – all to remove negatives and return value to communities.
For buyers, there’s nothing better than a big, slow housing market!
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About David Goldstein — David Goldstein is an Owner and Founding Partner of Express Schools, LLC. which operates online education providers Real Estate Express, Insurance License Express and License Tutor. Follow him on Twitter.