Understanding a Buyer’s Market in Real Estate

If you’re looking to buy a home or sell your current one, you may have heard the term buyer’s market. But what exactly does it mean, and how could it affect your plans?

What Is a Buyer’s Market?

A buyer’s market occurs when there are more homes for sale than there are buyers. In this situation, the market tends to favor buyers. Sellers may need to lower asking prices, offer incentives, or be more flexible with terms like the closing date.

Common signs of a buyer’s market include:

• Homes taking longer to sell.

• Frequent price reductions.

• Fewer competing offers on properties.

• Sellers willing to offer concessions or extra perks.

How Experts Determine Market Type

Real estate professionals use a few key metrics to tell whether it’s a buyer’s or seller’s market:

• Inventory-to-sales ratio – Above 1.0 means more listings than sales (buyer’s market). Below 1.0 means homes are selling faster than they’re listed (seller’s market).

• Months of supply – Six months or more indicates a buyer’s market; less than four months points to a seller’s market.

• Absorption rate – Under 10% shows low demand or high inventory (buyer’s market). Over 20% shows strong demand (seller’s market).

• Price trends – In a seller’s market, 60–80% of homes sell at or above asking. In a buyer’s market, it’s closer to 40% or less.

• Average time on market – 60–90 days typically signals a buyer’s market; under 30 days usually means a seller’s market.

Advantages for Buyers

If you’re buying during a buyer’s market, you have the upper hand. Here’s how to make the most of it:

• Take your time—there’s more inventory, so less pressure to rush.

• Negotiate on price, repairs, and closing costs.

• Always get a home inspection—it can strengthen your negotiating position.

• Be ready to walk away if terms aren’t met; there are other options.

• Shop around for the best mortgage rates and terms.

Strategies for Sellers

Selling in a buyer’s market can be challenging, so you’ll need to be competitive and strategic:

• Price wisely – Have your agent prepare a detailed market analysis and expect to list slightly below market value.

• Prepare your home – Complete necessary repairs, improve curb appeal, repaint with neutral colors, and stage your home.

• Be flexible – Offer concessions, consider early offers seriously, and adjust the closing date if needed.

• Plan ahead – If you’re buying another home before selling yours, explore bridge financing options.

Current Market Conditions

Recent data shows there are more sellers than buyers in many parts of the U.S., suggesting a shift toward a buyer’s market. However, prices in many areas remain high, keeping affordability a challenge. Remember, conditions can vary widely between regions—and even neighborhoods—so always rely on local market reports for the most accurate picture.

When Will the Next Buyer’s Market Come?

Real estate markets often move in cycles lasting 7–10 years. While timing can be unpredictable—especially with economic shifts, political changes, or global events—different regions may enter buyer’s markets at different times.

Bottom Line:

Knowing whether you’re in a buyer’s or seller’s market can shape your strategy, whether you’re buying or selling. Always track local trends and work with a knowledgeable real estate professional who understands your specific area.