Seller’s Market

What does a seller's market mean?

Updated March 8, 2022

In a seller’s market, where there are too few properties on the market and too many buyers, the homeowner is in command at the negotiating table. (The opposite situation in which the purchaser calls the shots is referred to as a buyer’s market.)

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Inventory

Multiple Listing Service

Vacancy rate

Bubble

When there are not enough properties to go around and everyone wants them, bidding wars that dramatically escalate the price typically occur in a seller’s market.

In a seller's market, prices can rise quickly. F. Muhammad/Pixabay

Homes sell at lighting speed, meaning that buyers have to be ready to purchase the property as-is. Because the seller is receiving numerous offers, winning buyers must have a significant advantage over their competitors, which could be anything from offering all cash to being pre-approved for a mortgage.

Here’s how to recognize a seller’s market:

  • In super-hot areas, homes are sold as soon as a “for sale” sign is put up, or sometimes even before the property comes on the market.
  • There are so few houses on the market that sometimes eager buyers snap them up sight unseen.
  • Prices keep going up, with “records” being established and bested rapidly.

Local real estate agents, as well as online sites like Redfin.com and Zillow.com, are good sources of information to determine which way the market is going.