Buyer’s Market vs Seller’s Market
Buyer’s Market vs. Seller’s Market: What’s the Difference?
In real estate, market conditions play a big role in your home buying or selling experience. A key factor in determining the type of market is the months of inventory, which measures how long it would take to sell all available homes at the current sales pace.
Buyer’s Market: This occurs when there are more homes for sale than buyers, typically indicated by 6 or more months of inventory. With a larger supply of homes, buyers have the advantage—they can often negotiate lower prices, request concessions, and take their time choosing a property. Sellers may need to be more flexible to attract offers.
Seller’s Market: This happens when there are more buyers than available homes, often shown by 3 months or less of inventory. With limited homes on the market, sellers have the upper hand—properties tend to sell quickly, often at or above asking price, and bidding wars can drive up costs. Buyers need to act fast and may have less room to negotiate.
Balanced Market: When inventory is around 4 to 5 months, the market is considered balanced, meaning neither buyers nor sellers have a clear advantage, and prices tend to be stable.
Understanding whether you’re in a buyer’s, seller’s, or balanced market can help you strategize your next steps. In North Carolina, market conditions can vary by region and shift over time, so partnering with an experienced realtor can help you navigate these dynamics effectively.
Why the 3-Month and 6-Month Rules Matter
The "months of inventory" metric is widely used in real estate to gauge market conditions. For example, if there are 1,000 homes for sale in an area and 200 homes are sold per month, the inventory is 5 months (1,000 ÷ 200). Historically, 6 months of inventory has been seen as a tipping point toward a buyer’s market, while 3 months or less signals a seller’s market. These benchmarks can vary slightly depending on local trends, but they’re a solid rule of thumb for understanding market dynamics.
Joy Watson has tools to access real time market conditions and has experience working in both.
