What’s the difference between a buyer’s and seller’s market?

Written by Posted On Tuesday, 30 October 2018 09:02

Several factors influence the housing market, including mortgage interest rates, inflation, employment, investment, construction, immigration, government assistance programs, and the health of local and world economies. All of these influence the supply and demand of the market which, in turn, affects prices.

There are three classifications experts use to describe the balance of supply and demand in the housing market:

Seller's market

A seller’s market is when there are more people looking to buy then there are homes available. This causes a rise in price above the long-term average rate of inflation. Typically this is indicated by a sales-to-active listings ratio of 20% or higher.

Buyer's market

In contrast, a buyer’s market is when there are many more homes for sale than there are buyers. As a result, prices increase slower than the long-term average rate of inflation. In extreme circumstances this can cause prices to decline. Typically this is indicated by a sales-to-active listings ratio below 12%. 

Balanced market

A balanced market occurs when supply and demand are about the same, with home prices rising in line with long-term average rate of inflation. Typically this is indicated by a sales-to-active listings ratio between 12% and 20%.

Summary

Over a sustained period of time:

  • a seller's market is represented by a ratio of 20% or higher
  • a buyer's market is represented by a ratio of 11% or lower
  • a balanced market rests between 12-19%
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Pete Caruso

Pete has been a licensed real estate agent since 1998 and has represented buyers and sellers throughout San Diego County.  Past clients include professional athletes, business owners, first time home buyers and sellers. 

A Police Officer for over 31 years, Pete began and finished his distinguished career in Downtown San Diego.   Witnessing the transformation of Downtown from burned out warehouses and vacant lots to the successful urban revitalization of today, Pete brings unmatched area knowledge to the San Diego Urban and Suburban market!

Pete and his wife, Anna, live and own in the East Village at The Legend but have lived all over San Diego for the past 35 years.  Pete offers new residents professional guidance from a local’s perspective. 


Negotiation skills, problem solving abilities, attention to detail and an easy-going nature, Pete is the perfect fit for the discerning client who demands perfection.

  • Possessing the knowledge and experience of 17 years as a Police Dog Handler/Trainer, Pete gives back to the community by offering free dog training classes to his fellow Downtowners.
  • Pete has taught animal behavior seminars for the trainers at Sea World, The San Diego Zoo and Canine Companions for Independence.Pete has supervised the training for well over 100 Police Dog teams during his career, along with dog handlers from the US Navy Seals. 

 

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