By the technical definition of months of supply, under 3 months of inventory is a seller's market. Between 3 months and 6 months of inventory is still technically balanced-to-seller-favoring, and 6 months + is a buyer’s market.

What does this mean?

If you are in a Seller’s Market the Seller has the advantage.

If you are in a Buyer’s Market the Buyer has the advantage.

Why does it matter? If you know what to expect, you can understand how to best position yourself for success. There are rules for each market and when you understand what rules you are playing by and when, you then know what to expect.

We start with this graph, then move to others.