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Whether you’re dreaming of your first home or planning to sell your current one, understanding your market position can make a huge difference in your success. Let’s dive into the data-driven differences between buyer’s and seller’s markets.
What Makes a Buyer’s Market?
Think of a buyer’s market as a shopping paradise – lots of homes for sale but fewer people buying. The math is simple: when the market absorption rate falls below 15%, buyers gain the advantage. In these conditions, you’ll see:
- Properties staying on the market 90+ days
- Sellers reducing prices by 5-10% on average
- More than 6 months of housing inventory available
- Multiple homes competing for each qualified buyer
- Sellers often covering closing costs (up to 15% of purchase price)
What Creates a Seller’s Market?
When market absorption rates exceed 20%, sellers gain the upper hand. Current indicators include:
- Homes selling within days, sometimes hours
- Sale prices 10-15% above asking price
- Less than 3 months of housing inventory
- Multiple offers on most properties
- Buyers waiving inspections and contingencies to compete
Market Triggers You Should Know: Economic factors that create these conditions include:
- Interest rates (lower rates typically create seller’s markets)
- Local job market growth or decline
- Population shifts
- Construction rates
- Development regulations
- Economic recessions or booms
How to Calculate Market Status: Use this simple formula:
- Divide active listings by homes sold in the last month
- Results over 7 = Buyer’s Market
- Results under 5 = Seller’s Market
- Between 5-7 = Balanced Market
Curious What The Market Looks Like Locally?
Sources:
https://info.creativehomestagers.com/blog/3-big-differences-between-buyers-and-sellers-markets
https://www.jovio.com/blog/the-difference-between-a-buyers-market-and-a-sellers-market
https://bungalow.com/articles/what-is-a-sellers-markethttps://www.zillow.com/sellers-guide/buyers-or-sellers-market
