How to Know if it’s a Buyers or Sellers Market?


The key metric when determining if a certain real estate market, at any given point, is the absorption rate. The absorption rate measures the months of inventory left on the market. Simply put, it measures how long it would take if no new listings came to the market for all the current properties for sale to be purchased.

A balanced market has four to six months of inventory in the absorption rate. A buyer’s market has anything over six months of inventory. A seller’s market has anything less than four months of inventory. In the peak of the market post-2008 in the years that followed, many towns and areas had absorption rates above six months. That would designate a buyer’s market. In the past few years, we’ve seen the opposite, with the absorption rate in some towns reaching as little as two weeks in early 2022, and a complete seller’s market. Right now in our market, the absorption rate is around two months. Not as severe of a seller’s market, however still very much one right now.

If you have any questions on inventory, what’s going on in the real estate market, or local happenings here in NJ, don’t hesitate to reach out to us here at Natale Realtors.