How To Recognize A Seller’s Market In Real Estate | Blogging

The real estate market is always changing – sometimes it swings in favor of buyers and sometimes it swings in favor of sellers. There are a variety of factors that contribute the market including the local economy, interest rates, the area and the home. These are important things to note in order to take full advantage of the conditions. Knowing what characteristics to look for and how to interpret them are key in making smart real estate decisions.

CHARACTERISTICS OF A SELLER’S MARKET:

  • Low inventory when compared to previous months and/or years
    • Homes are selling faster
    • Less than six months of inventory on the market
    • More homes are selling
    • Median sales prices are going up

Most sources use months of inventory the way to determine if it’s a buyer’s or seller’s market. This is the number of months it would take to sell all existing inventory without adding new listings. Balanced markets usually have a 4-6 month supply of homes – less than that means a seller’s market.

HOW TO FIGURE OUT THE MONTHS OF INVENTORY:

  1. Find out the total number of active listings for the month before the current one
    2. Find out the total number of sales or closed transactions for the same timeframe
    3. Divide the total number of listings by the number of sales and you have your months of inventory
Advertisements