Use current inventory level to determine market condition. The current inventory level is derived by dividing the monthly listing number by the monthly sold number which is shown in Months of Inventory graph. As a rule of thumb, an inventory level of less than three indicates a strong seller market while an inventory level greater than six indicates a buyer's market.
A download trend of listing inventory and an upward trend of the number of properties sold indicates the seller is in a better negotiating position.
An upward trend of listing inventory and a downward trend of the number of properties sold indicates the buyer is in a better negotiating position.