Sellers or Buyers Market?

You've heard alot about it being a Buyer's Market.  Have you ever wondered how exactly someone comes up with that?  Here's how it's determined.  Find out the number of homes that were sold in a certain period.  Here we will use a year.   Then divide that number by the number of months in that period or 12 in this case.  This gives a a figure of how many homes sold on average each month, otherwise referred to as the absorption rate.  Lastly, divide that monthly absorption rate into the current number of listings and that will give you the number of months it would take to deplete the current inventory of homes.  For example, say 36,000 homes sold in the past year which would mean that 12,000 sold each month on average.  Now there are 72,000 currently for sale on the market today, which would mean it would take 6 months in which to deplete the current inventory of homes.  The National Association of Realtors states that a 6 month period  is a balanced market, while any time period over 6 months would mean a buyer's market, and any time period less than 6 months would indicate a seller's market. This tool is one indicator of how long a new home to the market, may take to sell.