What does it actually mean when we talk about a...Buyer's Market, Seller's Market or a Balanced Market?

Before we discuss these, we need to understand another term - Months of Inventory. This is a real estate metric that estimates how long it will take to sell the current homes for sale at the current sales rate. In other words: if no new homes come to market, how long until we are completely sold out of inventory? We use months of inventory to calculate what kind of market we are experiencing. 

SELLER'S MARKET:
A seller's market happens when there are 0-2 months of inventory available. This means there are more buyers than homes available, giving sellers the advantage. In this market, homes often sell faster and for higher prices.

BUYER'S MARKET:
A buyer's market happens when there are 4+ months of inventory available. This means there are more homes for sale than buyers. This gives buyers more options and bargaining power.

BALANCED MARKET:
A balanced market happens when there are 2-4 months of inventory available. The number of homes for sale matches the number of buyers, creating a stable environment for both buyers and sellers.