Is It a Buyer’s or Seller’s Market? Here’s What to Know

If you’re considering buying or selling a home, among the very first questions you may ask yourself is: Is it a buyer’s or seller’s market? Knowing where your local real estate market stands will help you make better decisions upon entering the housing market.

While you can’t predict with complete certainty what happens in the market, you can get an idea whether it is currently a buyer’s or seller’s market by observing a few key indicators that would include how fast the homes sell and how many active buyers are shopping in your area.

Currently, the U.S. housing market is a seller’s market; however, the rising interest rates and house prices further render it unaffordable for many buyers, hinting at the likelihood of change, and with cashofferoption you’ll be able to make the sale of your house as fast as you can.

Recent data from Zillow® in April and May of 2024 indicates that the national market is inching its way to neutral territory, where buyers and sellers have equal standing. Zillow’s new Market Heat Index will help identify whether specific areas are better for buyers or sellers and provide you with realistic expectations of the price and experience you are likely to have in your local market.

Here’s how to determine whether it’s a buyer’s or seller’s market in your area.

What is a Buyer’s Market vs. Seller’s Market?

Buyer’s Market
A buyer’s market is a situation wherein there are more homes on the market than buyers. This means that buyers are at an advantage. With more selection, reduced prices, and better bargaining positions, homes take longer to sell, affording buyers more time to weigh their decisions.

Seller’s Market
On the other hand, a seller’s market happens when the number of buyers exceeds available homes. As expected, such an occurrence starts to create competition among buyers and may lead to multiple offers, which could even be over and above the price that the seller is asking for the house. Here, the seller benefits because their home sells quicker and with fewer concessions given to buyers.

How Can You Tell if You’re in a Buyer’s or Seller’s Market?

Work with a Local Real Estate Agent
Real estate agents know the local market. They help you put together buying or selling strategies, depending on whether it is a buyer’s or seller’s market in your location. They will advise you on how to write competitive offers if you are buying, or if you are selling, they will show you how your house compares to others and how best to market your house.

Check Available Inventory
How many homes are for sale can give you an idea if you are in a buyer’s or seller’s market. In a balanced market, there are five to seven months of supply. Lower inventory tends to help sellers, while higher inventory is better for buyers. You can check out inventory in your ZIP code with the Zillow home value look-up tool.

Check out Comps
“Comps” are homes recently sold that are comparable to the one you’re buying or selling. They give you an idea of current market conditions-typically, how quickly homes are selling and at what price ranges.

Track Trends in Home Prices
If home prices are going up, a seller’s market; if they’re coming down, it’s a buyer’s market. Keeping an eye on local trends will let you know which way the market’s leaning.

Watch for Distressed Properties
Distressed properties include homes in foreclosure and short sales. Both of these types of properties may signal a buyer’s market. The more such listings there are, the more choices buyers have.

Follow Mortgage Interest Rates
Low interest rates are another strong determining factor in market conditions. When the interest rates are low, more buyers enter the playing field and compete for available listings to create a seller’s market. If the interest rates are high, fewer people will be hunting for houses, and the scales may tip in favor of buyers.

Should You Sell Your Home Now?

Houses in the U.S. remain well sold, with the listed amount increasing due to more homes taking their time to sell. The trending market is neutral nationally, though conditions may vary in local perspectives.

Selling in a seller’s market has its advantages. Homes are usually sold more rapidly, and the seller is in a good bargaining position. That being said, the price of your house is a major determinant in the sale of your house. If the house is listed for too high, it runs the risk of staying on the market for longer and losing some of its edge.

Furthermore, as a seller, you might feel difficulties buying another home since the competition will most likely get tougher. It all goes down to your personal situation and goals.

Should You Buy a Home Right Now?

The best time to buy a home is when you feel ready financially. Though the competition may arise in the process of buying in a seller’s market, there are some tips for outshining other offers.

This means you are in a buyer’s market and will have more options, cuts in price, and bargaining chips. It is sometimes hard to predict when a market is going to shift, but being ready can enable you to quickly make an offer when you identify a home that would be suitable for your needs.

In all, buyer’s or seller’s market makes a huge difference in real estate. Keep a close eye on the trends in the market, and take into consideration your local expert’s advice and your personal readiness to make decisions.

Frequently Asked Questions: Is It a Buyer’s or a Seller’s Market?

What is a buyer’s market? A buyer’s market is a situation when there are more homes on the market than buyers. In this case, the buyer has more of an advantage when negotiating; it may take a little longer to sell a home, which in turn may cause price reductions and concessions from sellers.

What is a seller’s market? A seller’s market is a situation wherein there are more buyers than homes available. Competition builds up for buyers, and thus the seller usually enters into a bidding war and sells their homes quickly, often above their asking price.

How do I determine whether it is currently a buyer’s or a seller’s market in my area? To understand the local market conditions, you would typically consider the current inventory levels, recent comparable sales, and recent trends in home prices. You can also get help from an expert-a local real estate agent-to understand more precisely about your local market.

What are the characteristics of a buyer’s market? You’ll generally notice in a buyer’s market:

More inventory available versus buyers. Listings taking longer to sell. Sellers reducing prices and making concessions. Less competition among buyers. What are the signs of a seller’s market? If it is a seller’s market, you can expect to see:

• Fewer homes on the market relative to the number of buyers
• Homes selling quickly, often for over the asking price
• Multiple bids on properties
• Less price reduction and fewer concessions from the sellers
• Among those to consider are such variables as supply, mortgage interest rates, the state of the local economy, and demand on the part of homebuyers. A change in one or more of these variables has the potential to shift the balance of the market in favor of a buyer’s or seller’s market.

Buyers’ or sellers’ market now? Nationally, it has been a seller’s market; however, high interest rates and home price appreciation are causing the market to trend toward balanced or neutral. Conditions vary highly among locals.

Can I still buy a home in a seller’s market? Yes, you are able to buy a home in a seller’s market, but be prepared for some extra competition and to perhaps have to move quicker than if it were a buyer’s market. Being prepared with financing and making a strong offer will help increase the likelihood of success.

Should I wait until there is a buyer’s market to buy a house? The best time to purchase is based on your personal financial position and readiness, not solely the market. Of course, a buyer’s market has a better chance of choice and bargaining leverage, but waiting for it isn’t really practical at all. If you’re ready and you find a home you love, it might be time to move along.

Is now a good time to sell my house in a seller’s market? To a tee, yes, it probably is a great time to sell a house when it’s a seller’s market because homes generally sell more quickly and for a higher price. You will need to price your home correctly, or it could sit on the market too long and lose its appeal.

What Do I Need to Consider Before Selling My Home in a Seller’s Market? Before selling, you want to consider your future housing needs. Sure, you may be able to sell your current home rather quickly, but most likely you’ll be competing for your next home in the same competitive market.

Will high interest rates determine whether it is a buyer’s or seller’s market? Yes, high mortgage interest rates shrink the pool of buyers, thus giving the market to buyers. Lower rates tend to draw more buyers and favor sellers.

How do distressed properties affect the market? The more the distressed properties, or foreclosures and short sales, that are in a market, the more that market leans towards a buyer’s market. With more distressed properties comes more negotiating room, more availability, along with a decrease in pricing.

Can a market have no bias to either buyer or seller? Yes, a balanced or neutral market is one in which there is equal demand from buyers and supply of homes for sale. In this kind of market, neither buyer nor sellers will have any great advantage.

How long does it take for a market to shift from buyer-based to seller-based, and vice versa? It can be very gradual-a matter of months or even years-depending on the economy, interest rates, and local housing trends. Sometimes, major shifts in interest rates or huge economic events will speed these changes along.

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