Prior to the last couple of years, the real estate market locally was more or less a Balanced Market. This means there were roughly about the same number of Sellers as there were Buyers. A Balanced Market can also be described as a Neutral Market where in a given price range there is between a 4 to 7-month supply of homes. A Sellers Market is considered to be when the supply of homes is less than a 4-month supply. And a Buyers Market is considered to be when there is a 7-month supply or greater. This is also referred to as the Absorption Rate.
Examples: If there are 60 homes total for sale in the $250,000 to $300,000 price range and 20 homes sold last month, then there is a 3-month supply. (Sellers Market)  If there are 60 homes total for sale in the $250,000 to $300,000 price range and 10 homes sold last month, then there is a 6-month supply. (Neutral Market)  If there are 100 homes total for sale in the $250,000 to $300,000 price range and 10 homes sold last month, then there is a 10-month supply. (Buyers Market)
The market here lately has been improving from a decidedly Buyers Market towards a more Neutral Market. See my latest MarketWatch Newsletter for some real numbers, analysis and summary of last month’s market in our area. The low to moderate price ranges (up to $300,000) are already changing toward a more neutral market. The higher priced homes especially have a ways to go before there is a balance there.
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