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Melissa Rado…, Real Estate Pro in Bradenton, FL

What classifies the market as "a seller's market" verses "a buyer's market''?

Asked by Melissa Radovich, Bradenton, FL Tue Sep 11, 2012

Something about 6 months of inventory?

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Melissa, in a seller's market the demand for housing is greater than the inventory, on the otherhand, in a buyer's market there is too much inventory for the the demand.

There are different ways to determine a seller's market. When rentals are scarce and rental rates jump up making home ownership more affordable than renting. A scarcity of inventory. This could be specific to a county,or a zip code, or a neighborhood or a subdivision.

Right now you might see prices shifting upward in homes priced $200,000 and under. However, the upper end of the market is flat and in some instances declining.

At this time, you may also discover a surge in new home sales vs resales. Homebuyers looking to reduce their maintenance costs will consider buying a new home with new appliances, roof and air conditioning unit. They can finance the new home at very attractive low interest rates for 30 years versus buying a home and then updating it for a chunk of money that can not be financed but pulled out of savings.

Best regards,

Lynn Brock
Brock Realty Inc
941.313.1234
http://www.brockrealty-inc.com
0 votes Thank Flag Link Fri Oct 12, 2012
Hey Melissa!

Additionally, the typical amount of time it takes to sell a home is shrinking. Traditional sellers are now in the range (and passing it fast) of historic norms for a balanced market. In periods where the existing-home sales averaged close to a 6-month supply of homes in listed inventory – we are told it is close to market equilibrium.


In balanced market conditions, home prices generally rise 1 to 2 percentage points above the overall rate of inflation as measured by the Consumer Price Index.


Economist for NAR tell us the current forecast for the median existing home price to rise 4.5 to 5 percent this year and about 5 percent in 2013, which is somewhat stronger than historic norms because of the inventory shortfall that is most pronounced in the low price ranges. CPI growth is projected at 2.1 percent for 2012 and 2.3 percent next year.

Sincerely,

Sandra (Voss) LaFlamme,Realtor
0 votes Thank Flag Link Sun Sep 16, 2012
You are correct about it correlating to inventory. Generally, less than 6 months inventory is considered a sellers' market and more than 6 months inventory is considered a buyers' market. Right around a 6 month inventory level is a considered a neutral market, too.
It's all about the supply and demand.
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Tue Sep 11, 2012
Thanks Diane,
Is there a way to figure out the inventory on the MLS to see the market trends?
Flag Wed Sep 12, 2012
The market is determined by supply and demand. When there are a lot of homes on the market it becomes a buyers’ market. Homes may sit for a while and sellers become more flexible or drop their prices. When the inventory is less, it is a seller’s market. Homes sell more quickly and the sellers have more pricing power.

Tammy Hayes, Realtor
Green Lion Realty, Port Charlotte, FL
tammyhayesre@gmail.com
0 votes Thank Flag Link Tue Sep 11, 2012
Seller's market: A market which has more buyers than sellers. High prices is the result from this excess of demand over suppy.

Sincerely,

Maria E. Cipollone

http://www.Flahomespecialist.com
0 votes Thank Flag Link Tue Sep 11, 2012
That is what some consider the "cross over point" when the MLS has more inventory than can be sold off in 6 months you are trending to a buyer's market. When there is LESS inventory such that at current transaction rates the entire MLS would be sold in UNDER 6 months then it is trending to seller's market. Hence at the WORST of the bubble when there were times the MLS had 2 YEARS of inventory - well that was a buyer's market.

We are seeing though, here in SW FL, at least at certain price points, inventory at or even well under 6 months... so the pendulum is swinging back.
0 votes Thank Flag Link Tue Sep 11, 2012
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