Market
How to read the market yourself
Buyer’s market, seller’s market, balanced. What the words mean and the one number to watch.
Market conditions get discussed as though they are weather, something that happens to you. They are simpler than that, and you can watch them yourself.
The three states
- Seller's market. More buyers than homes. Competition, faster sales, prices under upward pressure.
- Buyer's market. More homes than buyers. Longer days on market, more negotiating room, conditions easier to keep.
- Balanced. Roughly matched. Most houses sell in a reasonable time near a reasonable price.
Watch inventory
The single most useful number is months of inventory. How many months it would take to sell everything currently listed at the current pace of sales.
As a rough guide, two to three months of inventory is balanced. Meaningfully below that leans to sellers. Meaningfully above leans to buyers.
It is more useful than average price, because it moves first. Inventory tells you where price is heading. Average price tells you where it has been.
Should you wait?
Sometimes yes. It depends on why you are moving, what you would be waiting for, and what it costs you to wait.
What I will not do is tell you the market is about to do something. Anyone who says that with confidence is guessing. We can look at what is actually happening right now, in your specific area and your specific price range, and make a decision with real information in front of us. That is a better use of the conversation than a forecast.
What the last few years taught
The pandemic market was the most unusual I have worked in. What stayed true afterward was straightforward. Do your due diligence even when everything is moving fast, because speed is exactly when people skip things they should not. And do not overshoot the listing price. The market will tell you what it thinks, and the sellers who listened did better than the ones who argued.
See current market numbers for the areas I work in.
Written by Mike Elsey, Broker, Royal LePage Real Estate Associates, Brokerage. General information about the process in Ontario, not legal, financial, tax, insurance or inspection advice.