One of the most important characteristics of the real estate market is whether it is a buyer’s market or a seller’s market. These two options are mutually exclusive, meaning the market can only be in one state. Let’s dive in and find out what the differences are, how to determine the current status of the market, and what it means for both buyers and sellers.
Buyer vs. Seller Markets
A seller’s market is a market condition in which high demand meets low supply. In such a scenario, sellers have the upper hand and dictate the prices. This usually results in higher sale prices, faster selling, and a rise in bidding wars and blind offers.
A buyer’s market is characterized by high supply and low demand. In these areas, homes can be listed for months, and prices are usually flat or dropping.
There is a third type of market – balanced. It lies between buyer and seller markets, however, you need to understand the statistics behind it. If, for example, the Canadian real estate market is considered overall balanced in 2026, it doesn’t mean that each individual province or city is also balanced. The Greater Toronto Area could be a buyer’s market due to high listing numbers, and Alberta could be a seller’s market due to high interprovincial migration. Together they form an overall balanced Canadian market, which varies across regions.
Markets can also be transitional or intermediate, like Buyer/Balanced or Seller/Balanced, if indicators have a small but noticeable tendency.
Many statistics can be used to determine the current state of the real estate market. One of the most popular and useful is Months of Inventory (MOI), which shows how long it would take to sell all houses in the area at the current selling pace. It is the perfect supply/demand index that shows the current market state.
- Less than 3 months – Seller’s market
- 3-6 months – Balanced market
- More than 6 months – Buyer’s market
However, metrics like MOI are not the reason but an indication of tendencies such as mortgage rates, population changes, investor activity, or even the quality of life. Use them, but only as part of a complex comparative analysis.