Buyer's Market

A buyers' market is marketplace that favors home buyers because more homes are listed than can be expected to sell in the near future. If, for example, 20 homes are listed in a neighborhood, and 5 were sold in the last month, the neighborhood has a 4-month supply of homes for sale.

Seller's Market

Of course, the market can -- and does -- change based on general economic conditions such as rising or falling interest rates or the local business climate such as a new company opening nearby. If, for example, all 20 homes listed plus 5 new listings sell within a few months, then the market has become a sellers' market, where buyer demand meets or exceeds the house-for-sale supply.