Understanding Buyer’s & Seller’s Markets

The distinction between a buyer’s and seller’s market comes down to classic supply and demand. If you are buying or selling a home, knowing the current status of the market will help you determine the right time and the right strategies for a quick and profitable sale. However, not all buyers and sellers have the luxury of a flexible timeline or the ability to wait for the perfect market conditions. Once you understand the dynamics of buyer’s and seller’s markets, you can adjust your strategy accordingly.

Contact Jimmy Carroll Realty for assistance selling or buying a home in Isle of Palms, SC!

A Buyer’s Market

A buyer’s market occurs when there are more homes for sale than there are buyers. This means there are a lot of options and the power is in the hands of the buyer. It’s important to note that the real estate market fluctuates with the seasons. There are typically more homes for sale in the summer months, which is great for buyers who are moving during this time.


A buyer’s market also happens when there is an influx in inventory. You can tell it is a buyer’s market by doing a little online research or discussing it with your realtor. By using online search tools, you can look at the inventory levels for homes in your particular area. Most websites will give you an option to compare the number of homes for sale in your area now to the number of homes for sale at this point last year. If the inventory is higher now, there is a good chance you’re working with a buyer’s market.

Local Economy

Another way to tell that you are in a buyer’s market is to analyze the local economy. Struggling economies, and areas where job growth and employment is low, will typically offer a more long-term buyer’s market than regions with rapidly growing industries and job growth.

Results of Buyer’s Markets

The most significant impact that a buyer’s market has on the real estate market is the lowering of home prices. Sellers who are desperate to attract buyers are more likely to lower their asking price or agree to specific contingencies. Motivated sellers know that they may have to do some compromising to stand out from the competition. As a buyer in a buyer’s market, you may be able to ask the seller to agree to certain things such as:

  • Lowering the asking price
  • Paying the closing costs
  • Including furniture, decor, or appliances in the sale price
  • Including a home warranty protection plan

In a buyer’s market, the power is in the hands of the buyer. In affluent areas like Isle of Palms, the market temperature is based on the list-to-sale price ratio, the prevalence of price cuts on home listings, and time-on-market. In a recent market analysis, 16.6% of homes in the Isle of Palms area experienced at least one price cut. This is usually a pretty clear indication that the power is in the hands of the buyers.

A Seller’s Market

A seller’s market is like a buyer’s market, but in reverse. In this case, more buyers are looking for homes than there are homes to buy. This means buyers are willing to pay top dollar, and sellers don’t have to settle to attract qualified buyers. When the market leans more in favor of the seller, it usually results in multiple offers. Sellers have the freedom and flexibility to accept the highest offer with the fewest contingencies. Buyers who offer lower than the asking price are usually disregarded in a seller’s market because the seller knows he/she can get asking price—or above—during a seller’s market.

Analyzing the Market

Analyzing the local market inventory is one way to determine the current market temperature. Essentially, it’s a seller’s market if the local inventory is sufficient for less than five months’ worth of sales. While getting key specific details about the condition of the market may be a job for a professional real estate agent, there are ways for buyers and sellers to analyze the local inventory in their area. The number of houses for sale in your area divided by the number of sales in the past 30 days will give you your local inventory.

For example, if there are ten houses for sale and only one sold in the last month, that means your area has ten months of inventory and would be considered a buyer’s market. But if five were sold, that’s two months of inventory and would be regarded as a seller’s market.

Other ways to tell you’re working in a seller’s market include:

  • Comparable sale prices are lower than current listing prices
  • More buyers are purchasing, resulting in higher closed sale numbers
  • Median sale prices are increasing
  • “For sale” signs are up for a few days before a “sale pending” or “sold” sign is attached

Jimmy Carroll Realty Works In Any Market

Understanding buyer’s and seller’s markets is quite simple. However, not everyone has the luxury of waiting until the market conditions are perfect to put their home up for sale or buy a new one. This is where working with a knowledgeable, experienced, and professional realtor comes in.

Jimmy Carroll Realty understands the ins and outs of the Isle of Palms real estate market and can come up with a strategy to help you buy or sell your home, regardless of market temperature.

Contact Jimmy Carroll Realty today!