What’s a Seller’s Market vs Buyer’s Market?

If you’re thinking about buying or selling a home in Queens (or anywhere in NYC) it helps to understand the difference between a seller’s market and a buyer’s market. These terms get thrown around a lot in real estate conversations, but knowing exactly what they mean can give you a real edge. Before we jump into the definition of each one, it is important to understand the metric that is used to determine whether a particular market is in a seller’s market or buyer’s market, this metric is called Month’s Supply.

In real estate, month’s supply (also known as “months of inventory”) is a metric that tells you how long it would take for all current homes on the market to sell if no new listings were added. It is essentially a snapshot of the balance between supply (inventory) and demand (sales velocity).

Months of Supply = Total Active Listings \ Average Sales Per Month

• Total Active Listings: The number of homes currently for sale at the end of a given month.
• Average Sales Per Month: Usually calculated by looking at the number of “closed” sales over a specific period (typically the last 6 months).

Example: If there are 50 homes for sale in a town and, on average, 10 homes sell every month, you have a 5-month supply.

What the Numbers Mean

Real estate professionals like us use this number to determine the “temperature” of the market. To understand this a little better, here’s how we gauge the market dynamics.

Month’s Supply of:

0-5 months = Seller’s Market (i.e. Market is in favor of sellers)

5-7 months = Balanced Market (i.e. Market is not in favor of anyone, supply & demand is fairly equal)

7+ months = Buyer’s Market (i.e. Market is in favor of buyers)

What is a Seller’s Market?

A seller’s market happens when there are more buyers than homes available. In other words, demand is high, and supply is low. If you’re selling, this is your moment, you have the upper hand.

Here are the hallmarks of a seller’s market:

• Low Inventory – There just aren’t enough homes to go around. Buyers are competing for limited options, which often leads to bidding wars or multiple offer situations.
• Fast Sales – Homes sell quickly, sometimes in a matter of days. In NYC, it’s not uncommon to see residential properties snapped up within a week.
• Rising Prices – High demand pushes prices up. Sellers in high demand neighborhoods might see offers come in above the listing price.
• Multiple Offers & Bidding Wars – You could have 3, 5, or even 10 buyers vying for the same property when you’re in a seller’s market. For sellers, this is a great way to drive up your final sale price.
• Limited Concessions – Buyers have less leverage, so in seller’s markets sellers rarely have to cover closing costs, offer discounts, or make any repairs.

If you’re a buyer in this kind of market, you need to be prepared to move fast, make strong offers, and sometimes accept that you won’t get every request met.

One key thing to note here is that real estate is local, and when it comes down to seller’s market vs buyer’s market, the most accurate depiction will be for a specific property type in a specific neighborhood. For example, you can have a situation where 1 bedroom coops in a neighborhood are in a buyer’s market while the single family homes in that same neighborhood are actually in a seller’s market. The reason why is because the supply and demand dynamics vary by property type and by neighborhood.

What Is a Buyer’s Market?

A buyer’s market is the flip side. Here, supply outpaces demand, more homes are on the market than there are buyers ready to buy. This scenario gives buyers power in negotiations.

Key features of a buyer’s market include:

• High Inventory & Slow Sales – Homes stay on the market longer. In NYC, you might see listings sit for months and you may see more priced changes, giving buyers more time to evaluate options.
• Lower Prices & Better Deals – Competition among sellers can push prices down or result in frequent price reductions because the serious sellers will ultimately do whatever they need to do in order to sell.
• Increased Negotiating Power – Buyers can request repairs, ask for seller concessions, discounts after inspection, or make lower offers without losing the property.
• Less Competition – Fewer bidding wars mean you’re not constantly battling other buyers for the same place.
• Greater Choice – With more homes available, buyers can take their time to find a property that really fits their needs.

So, what causes a buyer’s market in NYC?

• Economic Downturns – When the economy slows, buyer confidence drops, and fewer people are willing or able to purchase homes.
• High Interest Rates – Higher mortgage costs mean fewer buyers qualify for loans, reducing competition.
• Overdevelopment – More condos, apartments, and/or homes hitting the market can create an oversupply.

Essentially, a buyer’s market shifts the power from the seller to the buyer. Suddenly, buyers are calling the shots, at least a little more than usual.

Again, very important to keep in mind that in order to find out if the area you’re looking in is in a buyer’s market, you will need to have your agent pull up the current inventory, recent sales, and month’s supply for the type of property you’re looking for, and in the neighborhood you’re looking in. If you’re looking in multiple neighborhoods, you would need to calculate the month’s supply in each neighborhood in order to determine the market conditions for each neighborhood and to understand how much leverage you may or may not have.

NYC & Queens Market Realities

Queens is a unique borough. Neighborhoods very close to each other often can behave differently depending on local demand, new developments, housing stock, and the type of property. Ultimately, the supply & demand for any particular area will vary by property type and the month’s supply should be calculated for each zip code in order to get a clear picture of the market dynamics in the area you’re looking into.

For example:

1 bedroom coops in Jackson Heights may have a high month’s supply which would signify a buyer’s market. And at the same time, single family homes in Jackson heights may have low month’s supply which is indicative of a seller’s market. 2 family homes can be in a balanced market as well. For this reason, we always suggest having your agent run the month’s supply for each neighborhod and property type. Once you have this information, you will know where you stand in terms of leverage for negotiations, flexibility for pricing, etc.

Understanding the local dynamics is key. An experienced Queens real estate agents like our team members will be able to break these things down for you at no charge.

Whether it’s a buyer’s or seller’s market, the core principle is simple: it’s all about supply and demand. High demand and low supply give sellers the advantage. High supply and fewer buyers give buyers the advantage. If you’re looking to buy or sell in Queens or NYC, keeping an eye on local inventory, price trends, and neighborhood-specific demand is essential. And of course, having a guide who knows the boroughs inside and out, someone like QHT, can make the difference between a smooth deal and a stressful one 🙂