Our national and local economy is based upon business growth and goes through natural cycles. When the economy is growing at a steady rate everyone feels confident about his or her prospects for the future. They eat better, take more vacations, buy new cars...and they buy homes.

When the economy slows down, companies lay off employees and consumers are faced with an uncertain future. They become more conservative and spend less. This often causes the economy to decelerate even further and can lead to a recession.

During such a time, fewer people are buying homes. Still, many homeowners find themselves in a situation where they must sell. Employees get relocated, families outgrow their home, while retirements and job layoffs change the flow of available cash making it difficult to maintain a mortgage payment.

In the business cycle of real estate, there are buyers' markets and sellers' markets...and sometimes a stable market. It's all based on supply and/or demand.

Sellers' Market
You may have heard of someone selling their home during a "hot" real estate market, when homes would sell in a day or two, with multiple offers for over the asking price. When inventories are low and there are a lot of buyers in the market, sellers can expect to get a higher price due to little competition. 

Buyers' Market
When inventories increase, average marketing time increases. It takes longer for buyers to review the inventory and they are less likely to make full price offers. Seller’s will usually see fewer offers and will need to be more flexible with those they do receive. Buyers can generally do well in during a buyers' market.