Whenever people ask me how the market is, I always tell them the same thing: It depends. Specifically, it depends on whether you’re buying or selling. If you’re selling, it depends how your home is priced.
Real estate is local. In fact, I would call it sub-local. What’s the difference between a buyer’s market and a seller’s market, then? A buyer’s market simply means buyers have more control, and a seller’s market means sellers have more control. There are several important statistics agents look at to distinguish one from the other.
The first metric is the homes’ average days on market, or how long properties in a specific neighborhood stay on the market before going under contract. If the average is short, that’s an indication of a seller’s market. If the average is long, that means buyers have more control.
“If a lot of sellers are lowering the prices on their homes, it means they’re trying to entice buyers, which is a sure sign of a buyer’s market.”
We also look at the absorption rate (aka inventory), which measures how long it would take to sell all available homes on the market if no new homes were listed. If the absorption rate is five months or less, it’s considered a seller’s market. Six months is considered a balanced market. Anything higher than that is considered a buyer’s market.
Another factor I keep an eye on is price movement on the MLS. If a lot of sellers are lowering the prices on their homes, it means they’re trying to entice buyers, which is a sure sign of a buyer’s market.
If you’d like to know what your home is worth or whether you’re in a buyer’s or seller’s market, give me a call and I’d be happy to run the numbers for you. If you have any other real estate questions, feel free to reach out to me as well. I look forward to hearing from you.