What is a Balanced Market

[Chris Davidson]

Everyone has heard something along the line of less than 6 months inventory is a sellers market and more than 6 months is a buyers market. My question is has this changed?

This made sense historically, but as the residential real estate industry has evolved would six months of inventory really feel balanced or a neutral market? I believe 2-3 months inventory could be the new balanced market.

My reasoning for this is speed of information. Historically to find a house you used an agent who had access to the inventory. Now you can find houses through agents, websites, apps, and get instant notifications when the right house hits the market. Also there are more buyers in the market as investing has been made easier with property management software, connections to lenders anywhere.

Lastly who would think a seller has equal leverage to a buyer with 126 days on market or 4.5 months. 

Cheers!

[Justin Hammerle]

@Chris Davidson - I agree with your point on how demand has changed given the change in technology over the years.  But I would say it would be difficult to use an exact number for a balanced market nationwide given that demand is highly localized.  For example, demand and absorption are going to be much higher in urban core areas when compared to more rural areas.  In some cities through the country there is actually global demand not just domestic. I don't see how you can say with any certainty that 6 or 4.5 months is going to define a balanced market because of this.