What is a Seller’s Market?

If you’re in the housing market, you may be wondering if it’s a buyer’s or seller’s market right now. Knowing what part of the cycle you’re in can make a big difference. It matters how many options you’ll have, how quickly you’ll need to move on a deal, and the negotiation strategies you should use.

What Does “Seller’s Market” Mean?

When the demand for homes exceeds the supply, it’s a seller’s market. This can mean sellers have the upper hand in negotiations. There are more buyers than there are homes available to buy. This can lead to higher prices, quicker sales, and bidding wars. Both sellers and buyers are wise to approach house-hunting and negotiations knowing whether it’s a seller’s market or buyer’s market.

Key signs of a seller’s market are:

• Homes sell very quickly, often within days.
• Multiple offer situations and bidding wars are expected.
• Cash offers are more common.
• Sellers may receive offers above asking price.
• Inventory (homes for sale) is low compared to the number of people looking for homes.
• Buyers may waive conditions for their bid to be successful.

Digging deeper into the statistics, real estate market analysts might use these key indicators to determine if it’s a seller’s market:

Low Months of Supply

Months of supply tells you how fast all the homes on the market would sell if the current rate of sales were maintained. In seller’s markets, months of supply typically drops below 4 months. This can mean that if no new homes were listed, all available inventory would sell within 120 days or less. Markets with under 1 month of supply create extremely competitive conditions. Buyers may have to act within hours of a new listing.

High Absorption Rates

The absorption rate in real estate is the rate at which homes in a specific market are sold. In a seller’s market, absorption rates are over 25-30% monthly, meaning more than one in four available homes sells each month. Markets with absorption rates over 40% are thought of as extreme seller’s market conditions, where homes are sold almost as quickly as they’re listed.

Rising Price Trends

In seller’s markets, home prices rise as much as 2% per month. To spot a seller’s market, look for sustained upward price movement across different property types and price ranges. Another key indicator is whether homes are consistently selling over the asking price. If they are selling for increasingly higher prices than recent comparables, it may be a seller’s market.

High Number of Offers

In a strong seller’s market, over 50% of the homes on the market get multiple offers. Well-priced homes often get 5 to 15 competing bids. Some sellers might accept multiple bids before reviewing them, opting to consider all of them at the same time. Listings like this might be marked as “Offers due by…” or “Seller to review offers on…” If you see this strategy used more frequently, you’re in a seller’s market.

Shorter Time on the Market

In a seller’s market, houses typically sit on the market for under 30 days. An even stronger indicator is the percentage of homes selling within the first week; in strong seller’s markets, 40% to 60% of homes are sold within 7 days of listing.

Is It a Seller’s Market Right Now?

Is 2025 a buyer’s or seller’s market? The answer depends on where the home is. Nationally, buyer’s market conditions prevail, but buyer’s are finding that many markets are priced out of reach for them. In addition, many cities are seeing seller’s markets, especially cities in high-demand areas.

To find out if it’s a seller’s market or a buyer’s market where you are, look for a few key points. Look at local figures for average days on the market, inventory levels, the ratio of sale prices to asking prices, and buyer activities such as mortgage applications. Working with a real estate agent who has deep knowledge of the area can also be invaluable in determining search and negotiation strategies.

Advice for Buyers in a Seller’s Market

As a buyer in a seller’s market, you need to act quickly when you see a home that interests you. Here are some tips for handling the challenge successfully:

• Get pre-approved for a mortgage before you tour any homes. That will allow you to bid on homes quickly and without asking for a financing contingency.
• Be flexible on the closing date. Meeting the seller’s timeline can make the difference between your offer and your competitors’.
• Keep your contingencies reasonable.

Buying in a seller’s market means you’ll need to jump on deals that are appealing to you. You may have to compromise on some of your expectations. But with an experienced real estate agent and a decisive approach, you can still get the home you want at a fair price.

Advice for Sellers in a Seller’s Market

A seller’s market is good news for sellers, but like buyers, they need to be prepared for how quickly things can move. Despite their advantageous position, sellers still need to price their homes competitively to attract multiple offers and potentially start a bidding war.

Also, sellers shouldn’t overlook basics like attractive home staging and boosting their home’s curb appeal. With lots of leverage, it can be easy to get complacent and wait for the bids to roll in, but why not maximize your sale price by going the extra distance?

Conclusion

Whether you’re buying or selling a home, knowing where you are in the real estate market cycle is essential to proper preparation and successful negotiation. However, the answer to “is it a buyer’s or seller’s market right now?” isn’t as straightforward as you might think. It’s highly dependent on your location. Do your research, and hire a real estate agent with experience in your geographic area to partner on the best approach, no matter what market you’re in.