What is a Seller's Market?

Posted on: June 7, 2019

What is a sellers market and how does it impact the sale of your home?

Simply put, a sellers market has to do with supply and demand. In a sellers market, there are more buyers than there are available listings to purchase, so the buyer demand for housing far outweighs the inventory that is available to buy.

As you can imagine, this creates an environment within the market where there are sometimes 3-4 offers on a given home, causing buyers to bid higher in order to be the winning offer. Bidding wars and price escalations are also commonly seen during a sellers market, where buyers are competing against each other and will do whatever it takes to be the one to purchase an individual home.

How to measure if it’s a sellers market

A pretty typical metric that realtors use in the real estate world to measure whether we are in a sellers market is months of available inventory.

For example… If we hypothetically take all of the listings that are currently available, and we don’t have any more new inventory (new listings) come on the market, how long would it take that existing inventory to be snapped up by the buyer demand in that given moment?

The metric we look at is around 6 months for a balanced market. Anything less than 6 months is typically trending towards or is a sellers market.

In Seattle- for the last few years, we’ve only had sometimes a couple of weeks of inventory. Right now, we have about 1.5-2 months of inventory, which indicates a very strong sellers market.

So, if you’re considering selling your home and you want to yield the highest return possible, ask your local real estate professional or look up the statistic yourself: how many months of inventory does your local area have? This will tell you whether or not you are in a sellers market.

If you are in a sellers market, now is the time to strike and put your house on the market! You’ll have a lot more demand for your house than you might otherwise at some point in the future.

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