For quite a while, the housing market was a breeze for sellers. Homes were selling quickly, and buyers faced stiff competition. However, we’re starting to see some changes. While certain areas still have intense competition for buyers, others are experiencing longer listing times, which gives buyers a little extra room to negotiate.

It's really about two different markets, and understanding which one you’re navigating can greatly impact your moving experience.

What Is a Buyer’s Market vs. a Seller’s Market?

In a buyer’s market, there are many homes available, but not as many buyers. With less competition, homes tend to stay on the market longer and often sell for lower prices than they would in a seller’s market. This gives buyers more leverage when it comes to negotiating.

In a seller's market, the demand for homes exceeds the supply available for buyers. This means homes tend to sell quickly, and sellers often receive multiple offers. As a result, prices can rise significantly since buyers are prepared to pay more to secure their desired property.

The Market Is Starting To Balance Out

For a long time, nearly every market in the country was heavily favoring sellers. This created challenges for buyers, particularly those looking to purchase their first home. However, we're starting to see a change. Zillow indicates that the national housing market is finding a balance.

This graph shows an index that helps us understand if the national housing market is leaning towards a seller’s market, a buyer’s market, or if it’s pretty balanced. Each month, the market is rated on a scale from 0 to 100. The closer the number is to 100, the greater the advantage for sellers.

The orange bars in the center of the graph indicate the years when sellers were in the best position, which was from 2020 to early 2022. However, as time has passed, the market has started to level out. It transitioned from a strong seller’s market to a more moderate one, and recently, it has been pretty neutral, as shown by the gray bars on the right side of the graph. This shift means that buyers are starting to regain some negotiating power.

In a more balanced or neutral market, properties usually remain on the market for a longer duration, bidding wars occur less frequently, and sellers may have to make more compromises, such as lowering prices or assisting with closing expenses. This change provides today's buyers with more opportunities and reduced competition compared to a couple of years back.

Why Are Things Changing?

Inventory is really important in the housing market. When there are more homes available for sale, buyers have a wider range of choices, which tends to slow down the rise in home prices. According to data from Realtor.com, the increase in the number of homes for sale isn't consistent across all areas.

This graph compares the changes in inventory from last year, represented by the blue bars, to the data from 2017 to 2019, shown by the red bars, across various regions of the country.

The South and West regions of the U.S. have experienced significant increases in housing inventory over the past year, as indicated by the blue area on the right. Both regions are nearly back to their pre-pandemic inventory levels, which is why we’re seeing more buyer’s markets emerging there.

In the Northeast and Midwest, available homes are still significantly lower than what we saw before the pandemic, which explains why those red bars are so prominent. As a result, these regions are likely to continue experiencing seller’s markets for the foreseeable future.

What This Means for You

Every local market has its own dynamics. Even if national news reports a particular trend, your town—or even your neighborhood—might be experiencing something entirely different.

Understanding the type of market you're in can really enhance your decision-making when it comes to your move. This is precisely why partnering with a local real estate agent is crucial at this time.

““Agents are experts on their local markets and can craft buying or selling strategies tailored to local market conditions.”
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— Zillow

Agents are well-versed in the specific trends of your neighborhood, helping you make informed decisions whether you're buying or selling. Their expertise allows you to move confidently in any market condition. They know how to handle varying levels of buyer competition, uncover hidden gems in the area, price homes appropriately, negotiate effectively based on who holds the advantage, and much more.

Bottom Line

If you're considering a move or ready to take the plunge, let's chat. I can help you navigate our local market and develop a game plan that fits your needs.

What’s one thing you're wondering about regarding the market in our area?