Understanding the law of supply and demand is important when buying or selling property on the Kelowna real estate market.
The decision to buy or sell Kelowna real estate is an important one. Market conditions constantly change and it can be difficult to determine the best time to list or make an offer on a property.
There are a number of factors that affect the market, not the least of which is the law of supply and demand. The basic theory dictates that when there’s an oversupply of housing, there’ll be a corresponding drop in price. And when there’s a low supply of housing, there’ll be a consequent rise in price.
Pricing is clearly affected, but supply and demand can also affect the length of time properties stay on the market. In a slower period, houses might stay weeks or even months without receiving much interest. In busy periods, it’s possible to see potential home buyers line up to for showings and get into bidding wars.
Exception to the Rule
It’s possible to have a larger-than-average supply of housing and still see Kelowna real estate prices rise. If the properties in question are in high demand—perhaps it’s a new luxury real estate development that just came on the market—buyers will be attracted to it and will be pay premium prices to get it.
The Location Effect
Another potential anomaly to the supply and demand concept is location. A less desirable neighborhood can extend the normal amount of time to sell even if the particular style of home is popular.
Conversely, a tiny fixer-upper in a hot location could sell extremely well and very quickly.
The Buyers’ Market
Generally speaking, an oversupply in housing often leads to lower prices, which is known as a buyers’ market. With multiple houses to choose from in their price bracket, buyers can be more selective when choosing from among property sellers’ offerings. They can also often dictate prices.
In turn, property sellers in this type of environment will often compete with each other for available buyers by lowering their prices.
The Sellers’ Market
In a hot market, activity tends to spike as potential buyers will sometimes make offers faster than normal. Buyers are quick so as to not miss out on a property. This can have a number of affects:
- Buyers need to be more prepared to commit to an offer
- Sellers can list properties at higher prices knowing there’ll be competition for them
- It can lead to bidding wars among buyers
- With less inventory to choose from, buyers might have to wait to find their ideal home
When buying or selling property, you should always consult a Kelowna realtor to gauge market conditions to get maximum value for your hard-earned dollar.
If you’ve already sold you’re home and are ready to move on to your next property, you should read Ask a Kelowna Realtor: Tips for a Hassle-Free Move into Your New Luxury Home.
Are you looking to buy some Kelowna real estate? The experts at Quincy Vrecko & Associates can help you find the ideal home for your budget in a number of desirable neighbourhoods. Call us to book an appointment.