A Seller’s Market is one where the demand from buyers exceeds the supply of homes for sale. Pricing trends higher and is more attractive for sellers. The opposite of a seller’s market is a buyer’s market where the inventory of homes for sale exceeds the demand from buyers and prices trend downwards.

A seller’s market is usually determined by the absorption rate of homes in a particular area. When the absorption rate is higher than 20%, homes are selling quickly and months of supply is low, favoring home sellers.