5 minutes read
Is it a buyer’s or seller’s market? Learn how to tell and what it means for your homebuying plans.
KB
04/16/2025
Let’s face it.
The housing market is sometimes difficult to figure out.One moment, it seems to begoing one way, and the next, it goes to another direction.
So how do you make sense of this?
It all comes down to one question: Is this a buyer’s or seller’s market?
Knowing which sideyou are on determines everything: your negotiating power, your timeline, even your mental health.But what does thisreally mean for you as a homebuyer?
This isn’t about timing the market perfectly. It’s about knowing the right strategies and insights to help you thrive in any market.
Let’s dive in and set you up for success.
Imagine you walk into a grocery store where there are 5 apples and 50 people fighting over them. That’s a seller’s market.
Now picture 60 apples and only 10 shoppers. That’s a buyer’s market.
Simple, right?
Housing inventory exceeds demand.
Homes remain listed for weeks or months, prices stabilize or decline, and sellers often face the pressure of competing for a smaller pool of buyers.
Homebuyers gain significant leverage, allowing them to negotiate not only on the price but also on repairs, closing cost, or contingencies like inspection periods.
Sellers may even offer incentives, like covering transfer taxes, to attract offers. This encourages homebuyers to explore multiple homes, compare value, and avoid emotional decisions.
Demand exceeds supply.
Homes receive multiple offers within days of listing, often selling above asking price.
Bidding wars become common, and homebuyers may resort to unconventional strategies, like waiving inspectionsor submitting personal letter to appeal to the sellers’ emotions.
Sellers hold greater negotiating power in this environment. They sometimes rejectcontingencies that could delay the sale. In some cases, homebuyers face the pressure to act fast which compromise their preferences to secure a home.
What’s the catch? The housing market in USA isn’t one-size-fits-all. Your neighborhood may feel like a seller’s market while the neighborhood next to you may feel like a buyer’s market.
Understanding whether you’re in a buyer’s or seller’s market is all aboutanalyzing indicators.
Here are the key factors to evaluate, along with actionable steps to assess conditions:
A 6+ month supply of homes indicates a buyer’s market. This means there are enough homes for sale to last six months at the current sales pace. Homebuyers have more than enough choices which reduce competition.
A 3-month (or less) supply means a seller’s market. Inventory is scarce, so homes sell quickly, which sparks bidding wars.
What you should do: Search local home listings for the total number of active homes. You can also ask your agent or check regional housing reports.
Low DOM (10–30 days) means it’s a seller’s market. Homes sell rapidly, sometimes within hours of listing.
High DOM (60+ days) meansit’s a buyer’s market. Homes stay, giving homebuyers time to negotiate.
What you should do: Track DOM metrics. Note the patterns, are the homes in your target neighborhoodget sold within a weekor sitting for months?
When prices rise annually, it’s likely a seller’s market. Competition drives up values.
When prices are flat or declining, itleans toward a buyer’s market. Sellers usually lower prices to attract offers.
What you should do: Review quarterly market reports from local real estate associations. You can also use tools like the FHFA HPI for checking house price trends.
High mortgage rates (7%+) means higher monthly payments which reduce purchasing power.
Sellers may need to price homes more competitively or offer concessions to attract buyers. Inventory can accumulate, shifting the market toward buyers.
Low mortgage rates (below 6%)means cheaper borrowing which inflates budgets.
Homebuyers are qualified for larger loans which fuels demand and bidding wars. Sellers gain leverage and homes also sell quickly, sometimes with homebuyers waiving contingencies to compete.
Brace yourself for a highly competitive experience.
Speed is important. Hesitate for a moment, and that perfect 3-bedroom house could slip away. So, secure a pre-approval before house hunting, be prepared for bidding wars, where offers often exceed the asking price, and some homebuyers even waive inspections.
Set a strict budget and avoid emotional decisions. Flexibility can give you an edge. You can also consider offering a quick closing or writing a heartfelt personal note to make your offer stand out.
The advantage is in your favor, so use it wisely.
You can negotiate confidently by asking for repairs, price reductions, or closing cost assistance. Take your time to explore multiple homes, sleep on your decisions, and resist the pressure to rush.
If a home listing has been sitting for months, a lowoffer may work in your favor. But keep in mind thatmarkets rarely stay extreme forever, even in a seller's market, overpriced homes eventually linger, anddesirable homes still attract competition in a buyer's market,
Understanding market conditions is highly important.Your ability to adapt is what ultimately saves you time, stress, and money.
There are modern tools like WithJoy.AI that are changing the homebuying transactions.
Instead of depending on a traditional buyer’s agent, and leaving their 2.5-3% commission on the table, our platform and human agents guides you through the entire homebuying process while returning 70% of the buyer’s agent commission directly to you. That’s thousands saved!
Whether it’s a buyer’s or seller’s market, putting those funds straight back in your pocket is always a win.
Happy house hunting! 🏠✨
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