Buyer's Market vs. Seller's Market: How Conditions Shape Your Strategy
The same home, the same buyer, the same agent: the offer strategy looks completely different depending on whether we are in a buyer's market or a seller's market. Understanding which one you are in before you write your first offer is not optional.
What Each Type of Market Means
A seller's market has more buyers competing for fewer homes. Inventory is low, days on market are short, and sellers routinely receive multiple offers. Buyers face pressure to move quickly, offer at or above list price, and limit contingencies to stay competitive.
A buyer's market has more homes available than active buyers. Sellers wait longer for offers, price reductions are common, and buyers have room to negotiate terms, request repairs, and include protective contingencies without risking the deal.
How to Read Where the Market Is
Look at months of supply: the number of active listings divided by average monthly sales. Under three months typically signals a seller's market. Above six months typically signals a buyer's market. Between three and six is more balanced. I pull this data from ARMLS for specific cities and zip codes, not for the whole metro, because conditions vary significantly by submarket.
Also watch list-price-to-sale-price ratios and average days on market. If homes are selling above list in under two weeks, sellers have the stronger position. If they are sitting for 45-plus days and taking reductions, buyers do.
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How the Phoenix Valley Varies by Submarket
The Phoenix metro is not one market. Scottsdale, Cave Creek, Peoria, Buckeye, and Queen Creek can have meaningfully different conditions at the same time. A price segment can also behave differently than the overall market -- entry-level homes in a given zip code may be competing while higher-end homes in the same area sit.
I watch ARMLS data by city, zip code, and price range. When I am working a specific search for a buyer, I pull hyper-local stats for that exact target area so we are not operating on metro-wide assumptions.
How Strategy Changes in Each Condition
In a seller's market, you move fast, come in strong on price, minimize contingency timelines where you safely can, and write a clean offer. Escalation clauses can be useful when competition is intense, but only when you genuinely understand the ceiling you are setting.
In a buyer's market, you negotiate price, request seller concessions toward closing costs, take the full inspection period, and let the process breathe. You do not need to manufacture urgency when the market does not require it.
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Written by
Jon Hegreness
REALTOR / Associate Broker, Howe Realty. AZ License BR540940000. 24 years in Phoenix Valley residential real estate.
I am a full-time Valley associate broker, not a call center. If anything here raised a question about your own move, ask me and you get a straight answer from the person who wrote this, every time.
Common questions
- How do I know if it is a buyer's or seller's market right now in Phoenix?
- Pull months of supply for the specific area and price range you are targeting. I do this for every buyer I work with. Metro-wide numbers can be misleading when your target submarket is behaving differently.
- Should I wait for a buyer's market before purchasing?
- Trying to time the market is risky. The right time to buy is when your finances are ready and you have found a home that fits your needs at a price that makes sense. Market timing attempts frequently result in missing good opportunities.
- Can I still negotiate in a seller's market?
- Often yes, especially on terms other than price: possession date, minor repairs, home warranty. But you have to read each situation. I help buyers find the negotiating room that exists even in competitive conditions.
- What is an escalation clause and when should I use one?
- An escalation clause automatically increases your offer by a set increment above any competing offer, up to a maximum you set. It can be effective in multiple-offer situations, but you need to be comfortable with your ceiling and understand that not all sellers accept them.
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