What Constitutes a Buyers or Sellers Market?

SPECIAL EDITION #3

WHAT CONSTITUTES A BUYER'S OR SELLER'S MARKET: Statistics, Psychology, Expectations

Patrick Carlisle,

COMPASS,

Chief Market Analyst,

San Francisco Bay Area recently put together his findings regarding Statistics and the Definition of Buyers' and Sellers' Market. In his findings he reports:

An issue I have been mulling is why some standard statistics - for example, months supply of inventory figures, still low by historical standards - by typical definition still indicate a sellers' market when demand has obviously weakened dramatically since spring.

Below is what I've come up with:

An example of a severely outdated statistical norm often quoted is that 6 months of inventory signifies a balanced market. Perhaps, that might have been true 40 or 50 years ago (or in other areas of the country), but the last time the overall Bay Area saw sustained levels of 6+ months of inventory in the housing market was in late 2007- early 2009 during the subprime crash and deep housing market recession that followed. (The SF condo market also spiked over 6 months in the immediate aftermath of the pandemic hitting.)

To view Compass Bay Area Market Reports click here.

Interest rates are basically unchanged from last week (6.94% per Freddie Mac today). The same is true of the S&P 500, despite dramatic ups and downs over the period.

As always, please let us know if there is anything we can do to help you and yours with your real estate needs and homeownership questions.

Deborah Cole Team

Luxury Property Specialists

DRE 01937272 | DRE 02154086

415.497.9975 | 415.302.1608
[email protected]

[email protected]

Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material presented herein is intended for informational purposes only and is compiled from sources deemed reliable but has not been verified. Changes in price, condition, sale or withdrawal may be made without notice. No statement is made as to accuracy of any description. All measurements and square footage are approximate. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.

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