Back HomeBuyer’s Market Vs Seller’s Market – Stats for the Madison Area
December 3rd, 2015 by keithandkinseyIt’s important for real estate buyers and sellers to understand what type of market they are in before they buy or sell a home. If the market is skewed in favor of a buyer or a seller it can affect your negotiation strategy, the speed at which you need to make a decision, and how aggressive you are with your offer or list price.
Think back to your high school economics class about supply and demand. A Buyer’s market is when there are more sellers than buyers, in other words there is a larger supply of homes for sale than there are buyers for those homes. This results in good deals for buyers, and more time to be choosy. A Seller’s market is the opposite, there are more buyers than sellers, resulting in better sales prices and quicker sales for sellers. Since it’s all based on the available supply of housing, we generally use the following rules of thumb to define a market; 0-4 months of inventory is a Seller’s market, 5-7 months is a balanced market, and 8-12+ months is a Buyer’s market.
You can see from the graph below that most of the communities around Dane County are in the 1-4 months of inventory range which would classify them as a Seller’s market. There are a few places like Belleville, Maple Bluff, Waunakee, and Westport that are between 4 and 6 months of housing inventory which makes them a more balanced market. Currently none of these communities within a few miles of Madison are in a Buyer’s market.
