A buyer’s market
Everyone is saying its a buyers market… good for buyers, not so good for sellers accustomed to selling quickly at asking or close to asking prices. Just what is a buyers market and when does a market become a buyers market? A quick search on Google reveals the following definitions:
“A market condition which occurs in real estate where more homes are for sale than there are interested buyers.”
“Market conditions that favor buyers ie there are more sellers than buyers in the market. As a result buyers have ample choice of properties and may negotiate lower prices.”
“A period existing in the real estate market, whereas the number of available homes exceeds the number of buyers actively searching for a home. Such a condition could potentially favor the buyer because home sellers must remain flexible in their pricing and contract requirements in order to compete with the large volume of other home sellers.”
A buyer’s market is calculated based on past sales versus the number of properties currently on the market. For example, in Princeville as of 4 14-07, there are 142 condos on the market (not counting the 50 fractionals shares.) As for sales, since 10/1/06 there were 56 sales, only 27 of which were resales. The other 29 sales were in the new Kai’ulani and Nihilani condo complexes. Since most of the new sales were pre-sales that were initiated about 2 years ago, a clearer picture is provided by using on the true re-sales number for determing the market activity. With 29 sales over a 6 month period, that averages out to 4.8 or rounded up to 5 sales a month. At 5 sales a month, we have enough inventory for 28 months. Even if the new sales are included, with 56 sales for an average of 9.3 or 10 sales a month. Even at this “inflated” perspective, inventory exists for well over a year! Generally speaking, if the inventory is enough to supply demand for over 6 months, it is considered a buyer’s market.
Aloha Elaine
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