Buyer and Seller Markets

Buyers' Market

A buyers' market refers to a marketplace that favors home buyers because more homes are listed than can be expected sell in the near future. If, for example, 20 homes are listed in a neighborhood, and 5 were sold in the last month, the neighborhood has a 4-month supply of homes for sale.   A balanced market is 6 months worth of inventory. With between 18 months and 24 months of inventory currently on the market, this is a once in a lifetime Buyers Market. Georgia is on sale, much of it on the clearance rack.  April 22, 2009 update--yesterday I ran an absorption report on a specifc Suwanee subdivision and there was only 8 months worth of inventory and zero foreclosures on the market for sale.  Wow.  

Sellers' Market

Of course, the market can - and does - change based on general economic conditions such as rising or falling interest rates, or the local business climate such as a new company opening nearby. If, for example, all 20 homes listed plus 5 new listings sell within a few months, then the market has become a sellers' market, where buyer demand meets or exceeds the house-for-sale supply.   One day this market will flip, from a Buyers Market to a Sellers Market.