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Determining if it’s a Buyers' or Sellers’ Market

Is it the right time to sell? Here’s the formula to find out!
Posted: January 15, 2018 by Erin Wood

So you’re on the fence about selling your home. You’re not sure it’s the “right time” to sell. While there are many factors that influence this decision, one important factor you may have not considered is the current housing market. You’ve probably heard the phrase “It’s a buyer or a seller’s market” before but what does this real estate mumbo-jumbo really mean? In real estate, the housing market is gauged by “months of supply.” Months of supply tells you how many months it would take for all the current homes for sale on the market to sell.  As you would imagine – with greater demand and less supply, the market tips in your favor. Generally, a healthy real estate market for both buyers and sellers will have about 6 months’ supply. So if the number of homes for sale in the area falls below this supply, then the market generally tends to benefit the seller. If the market favors the seller, this could potentially help you sell faster or get more $$ for your home. So how can you determine if it’s a good time to sell?

Quantifying Average Number of Homes Sold

To determine if it’s a buyer or seller’s market, you must first determine the average number of homes sold per month. To start, pick a market as granular as possible as the market can vary in different demographic areas, and neighborhoods -  so pick a neighborhood or small area. Now visit in your web browser,, select your data range (6 months) in the advanced tab and in the search bar add your desired area. Make sure that you have “Recently Sold,” selected from the drop-down and that the home type is “Houses.” For example, when searching the area, Kettering Oh, there were 459 results or 459 homes sold. Now take the 459 homes sold and divide by the number of month’s supply (6 months). This number is the average number of homes sold monthly for the past 6 months. 

Determining Month’s Supply

Month’s supply is determined by dividing the current supply by the average number of homes sold per month. To do this start with Zillow search, and determine the current homes for sale in the same area. For Kettering Oh, the current number of homes for sale is 228. The next step is to divide the current number of homes (141) by the average number of homes sold monthly (76.5) which equals 1.84 or close to 2 months’ supply. As mentioned previously, 6 months supply is considered the benchmark for a balanced market. Since Kettering, OH has had little over 2 months supply in the past 6 months, the market is heavily favoring sellers.

Following this equation is great option to help you determine if it’s potentially the “right time,” to buy or sell. Another option that can help save you time, is reaching out to a qualified real estate professional who can inform you on the current market conditions and keep you updated on market changes. Interested in speaking with a Realtor today? Click here to check out available agents in your area.



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