Definition of Buyer's Market:
Orange County, California Buyer’s Market:
This is situation in the Orange County real estate market in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations. Buyer's Market is commonly used to describe real estate markets, but it applies to any type of market where there is more product available than there are people who want to buy it. The opposite of a buyer's market is a seller's: market a situation in which demand exceeds supply and owners have an advantage over buyers in price negotiations. During the nationwide housing bubble of the early-to-mid 2000s, the real estate market was considered to be a seller's market. Property was in high demand and was likely to sell even if it was overpriced or not in the best condition. In many cases, Orange County homes would receive multiple offers and the price would be bid up above the seller's initial asking price. The subsequent Orange County housing market crash created a buyer's market in which sellers had to work much harder to generate interest in their properties. Buyers expected homes to be in excellent condition or priced at a discount and could often secure a purchase agreement for less than the seller's asking price for the property. The Orange County Real Estate market is hyper-sensitive to supply/demand dynamics.
A market's absorption rate is the best way to figure out whether a certain area is acting as a buyer or seller's market. The absorption rate is found by looking at how many homes sold in a given month and dividing that number by the total number of homes for sale at the end of that month. An absorption rate of 20% or lower is usually considered a buyer's market since homes are selling relatively slowly and the number of months of supply is considered high.