Telling a buyer market from a seller market
The signals that tell you which one you are in, and what changes about how you offer.
4 minute read
The terms get used loosely and usually about whole cities, which is too coarse to be useful. Conditions differ by price band and by neighborhood within the same town.
What is worth learning is how to read the signals for the specific slice you are shopping in.
The signals
How long homes sit before going under contract, and whether that is getting longer or shorter.
Whether homes sell above, at, or below asking. How often prices are reduced. How much is for sale compared with how much is selling - the measure agents call months of supply.
Take all of them for your price band and area rather than for the metro. A city can be two different markets at once.
In a seller market
Homes go quickly, often above asking, sometimes with multiple offers. Sellers can decline contingencies.
You need to be genuinely ready - preapproved, able to view immediately, and clear in advance on your ceiling. Deciding your limit in the moment is how people overpay.
Waiving protections is how buyers compete here. Understand precisely what you are giving up, because a waived inspection or appraisal contingency is a real financial risk rather than a formality.
In a buyer market
Homes sit. Prices get reduced. Sellers negotiate on repairs and on closing costs.
Keep your contingencies. Ask for the things that were impossible eighteen months earlier. Time is on your side and using it is the advantage.
What does not change
What you can afford. Market conditions change your strategy, not your budget, and the buyers who get hurt are the ones who let a competitive market move their ceiling.
The short version
- Read the signals for your price band and area, not the whole city.
- Conditions change your strategy. They must not change your ceiling.
- Waiving a contingency is a financial risk, not a formality.
This is general information, not advice about your situation. Zoila Moscoso can tell you what applies to you.
Ask about your situationRead next
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What there is to negotiate besides price, and when your leverage is actually highest.
When is the right time to buy
Why the answer is about your situation rather than about the market.