What’s the difference between a buyer’s market and a seller’s market, and how can you tell what kind of real estate environment we’re in today?

In short, it all comes down to supply and demand, meaning how many homes are for sale and how many buyers are actively looking. These conditions shift over time, and knowing what kind of market you are in can help you make smarter decisions whether you are buying or selling.

What Defines a Buyer’s Market?

A buyer’s market exists when the number of homes for sale exceeds buyer demand. In this scenario:

• Buyers have more negotiating power

• Homes tend to stay on the market longer

• Sellers may need to reduce prices or offer concessions to attract buyers

Key traits of a buyer’s market include:

• High inventory or supply, with more homes listed than buyers, often measured as more than six months of inventory

• Price stabilization or downward pressure, where sellers compete, which can slow price growth or even cause slight declines

• Longer days on market, meaning properties stay listed longer, giving buyers more time to shop

In markets like parts of the Puget Sound, increased inventory and some pricing shifts have slightly eased competition compared to the fast pace of recent years. While not a full buyer’s market everywhere, conditions are changing.

What Defines a Seller’s Market?

A seller’s market happens when demand is higher than supply, meaning more buyers are looking than there are homes available. In this climate:

• Sellers often get multiple offers

• Homes sell quickly, sometimes above asking price

• Buyers may need to act fast and competitively

Typical seller’s market signals include:

• Low supply, usually less than about six months of inventory

• Homes selling quickly, with fewer days on market

• Strong sale to list price ratios, where houses often sell at or above asking price

In many parts of Washington in 2025, buyer demand is still solid and inventory remains moderate compared to national trends. However, we are seeing more homes available and slower price growth, especially across the greater Seattle area, which influences the Tacoma and Puget Sound region.

How to Tell Which Market You Are In

Knowing whether it is a buyer’s or seller’s market locally is not guesswork. Here are the key indicators to watch:

1. Months of Inventory

This shows how long it would take to sell all homes currently listed at the current pace of sales.

• More than 6 months = buyer’s market

• Around 6 months = balanced market

• Less than 6 months = seller’s market

2. Days on Market

Track how long homes stay on the market before going under contract.

• Short DOM (under 30 days) suggests strong demand

• Longer DOM points toward buyer leverage

3. Price Trends

• Rising prices usually signal a seller’s market

• Flat or falling prices may indicate more buyer flexibility

4. Competition Levels

• Multiple offers and bidding wars mean sellers have the advantage

• Frequent price reductions and longer negotiations suggest buyers may have more control

5. Interest Rates and Economic Conditions

Higher mortgage rates reduce buyer affordability. That often cools demand and increases inventory, which can shift the advantage back to buyers

What This Means for You

Whether you are buying or selling, the type of market you are in affects your strategy:

• Buyers in a seller’s market need to be ready to move fast and have financing in place

• Sellers in a buyer’s market need to price wisely and be prepared for negotiation

Because local market conditions can be very different from national trends, the most helpful insights come from working with someone who understands what is happening right here in the Tacoma and Puget Sound area.

Thinking about buying or selling in the Tacoma or Puget Sound area?
Market conditions are changing, and I am here to help you make sense of them.
Reach out to me with any questions. I would love to hear from you.