El Dorado Hills - Homes & News - DeeDee Riley Realtor: Buyer's Market or Seller's Market?

Buyer's Market or Seller's Market?

Buyer’s Market or Seller’s Market?  The discussion about whether we are in a buyer’s market or a seller’s market comes up a lot these days.  A buyer’s market is defined as having 6 months or more of inventory and a seller’s market as having 6 months or less of inventory. The way that is calculated is by taking the listed homes on the market and dividing it by the sales for that month. 

This may help in determining who has the negotiating power in a situation but when it comes to putting in an offer or listing a home for sale, there are several other factors that come in to play and the answer is not so cut and dry and you need to look further for correct pricing.   

 First thing to consider is the locality.  Real estate is local and it has to be looked at on the local level first to determine where the inventory stands in that area.

 From there you will find that different price ranges have different inventory levels and you need to look at the status in that price level. For instance, in El Dorado Hills where I live and work, the under $400K price range shows 4.3 months of inventory but the $750K and above price range shows 34 months of inventory according to September statistics.

 This month Lyon Real Estate’s Trendgraphix press release states that the lower price ranges have stabilized and even moved up slightly.  This is because there are so many buyers in that range and they are keeping the inventory to a minimum. With multiple offers on homes in that range, what we are seeing is a seller’s market with offers at full price and even over. Buyers in this instance have little negotiating power. 

 As the price of homes go up there are fewer and fewer buyers in those price ranges and as I stated in my El Dorado Hills example there can be several months’ worth of supply. Buyers in this scenario tend to have more negotiating power and it is considered a buyer’s market. But not always!   Sometimes we find that the house itself is a big factor. As an example, in El Dorado Hills there can be several buyers who are looking for the same thing in a house and when a new listing comes on the market that fits that criterion, they can be facing competition from multiple offers.  Whenever there are multiple offers the seller takes control.

 To summarize, if you are in the market to buy or sell a home, don’t let the “buyer’s market” or “seller’s market” talk guide your offers and pricing.

 What’s your scenario?  Feel free to post it in a comment and we can discuss it!




DeeDee Riley - El Dorado Hills Realtor - Lyon Real Estate - CABRE#01499004


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Comment balloon 6 commentsDeeDee Riley • October 27 2009 12:00AM


Good post DeeDee--- I think we are definitely in a buyers market in La Quinta--- now is the time to BUY!!  Kathy

Posted by Kathy Schowe, La Quinta, California 760-333-8886 (California Lifestyle Realty) over 9 years ago

Interesting. I have have always been told that a balanced market has 5 months of inventory. First time I've heard it as 6, but I brought over the 5 from our Florida training.

Posted by Vickie Nagy, Vickie Jean the Palm Springs Condo Queen (Coldwell Banker Residential Real Estate) over 9 years ago

It depends currently on the price range the upper end has vew buyers here and the lower end is running fast.

Posted by Tim Lorenz, 949 874-2247 (TIM LORENZ - Elite Home Sales Team) over 9 years ago

I agree that the price range is key; in our area, homes under $500K are moving quickly and there aren't enough of them.

Posted by Michelle Carr-Crowe Just Call 408-252-8900 Top 1%!, Family Helping Families Buy & Sell Homes 40+ Years (Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty) over 9 years ago

DeeDee-In Charleston, We are still in a buyer's market, but for properties that are priced right and in excellent condition, they are still selling like hotcakes with an average day on market of 90 or less. 

Posted by Michele Reneau, Realtor, GRI ~ Charleston, SC Relocation Experts Team (Certified Staging Professional (CSP) Elite Instructor) over 9 years ago

Thank you for all of your comments.  Seems the general consensus is that the lower price ranges are tending to be back in a seller's market and the upper end are still in a buyer's market.

Posted by DeeDee Riley, Realtor - El Dorado Hills & the Surrounding Areas (Lyon Real Estate - El Dorado Hills CA) over 9 years ago