What Defines a Seller’s Market—And How Can a Buyer Compete?

Tue, 19 May 2026 17:05:48 GMT

The “6-Month Rule”

In real estate, a balanced market is defined by having about six months of inventory. This means if no new houses were listed, it would take six months to sell everything currently on the market. Anything over six months is a buyer’s market, and anything below is a seller’s market.

To put our current situation in perspective: over the last few years, the North Shore has been sitting on only one to two months of inventory. While this fluctuates slightly by town and season, the trend is clear: inventory is incredibly low, and there are no signs of that changing soon. It is basic Econ 101—when supply is low and demand is high, prices go up.

On the North Shore of Chicago, we hear it constantly: "Inventory is low and prices are rising." But what does that actually mean for you?

There isn't one single reason and know one really knows, but here are some issues I see:

The “Locked-In” effect: Many homeowners refinanced in 2020 at rates between 2.5% and 3%. Even if they want to move, they are hesitant to trade that rate for a higher one, especially when they’re earning a solid return in money market accounts.
The Empty-Nester Dilemma: Historically, empty-nesters moved back to the city. PostCOVID, many are reluctant to trade their spacious homes and yards for a condo. Furthermore, prices in popular "retirement" states in the South have skyrocketed, making the move less financially enticing.
The "Perfect" Downsize is Missing: There is a severe shortage of move-in-ready ranches. When these hit the market, they sell instantly for top dollar. As a result, many people are staying in their large family homes much longer than they used to.

Why Is Inventory So Low?

How to Compete (and Win)

The market is challenging. I’ve stood in long lines in the rain just to get clients into an open house. I’ve walked into entryways so full of buyers' shoes you can barely see the floor. I even had a client’s 10-year-old son walk into a house and chirp, "Hello, friendly competition!" to the other families. He clearly understood the uphill battle his parents were facing.

Since I don't have a magic wand, here is my best advice for buyers navigating the North Shore:

1. Align with an Experienced Full-Time Agent

Some buyers think they are more attractive to a seller if there isn't a broker commission involved. In reality, the opposite is often true. Listing agents prefer working with a professional buyer’s agent because they provide a "clean" transaction. They ensure the buyer is fully qualified, keep the timeline on track, and prevent the deal from falling apart over minor inspection credits.

2. Master the "Non-Price" Terms

Price is the biggest piece of the puzzle, but these strategies can make your offer stand out:

The "As-Is" Offer: You still perform an inspection for your own knowledge, but you signal to the seller that you won't ask for repairs (sometimes with an exception for major health and safety issues).
Flexible Closing & Rent-Backs: Learn the seller’s timeline. Offering a quick closing followed by a free "rent-back" period can be a massive incentive for a seller who hasn't found their next home yet.
Cash (or "Cash-Like") Offers: If you can provide proof of funds and waive the mortgage contingency, you remove the appraisal risk for the seller. This is a powerful move in a market where homes often sell for six figures over asking.

3. Leverage Connections

An established agent is often well-connected and may hear about a "Pocket Listing" before it hits the open market. This allows you to plan your schedule or, in rare cases, see the home before a bidding war even begins.

We are seeing historical lows in inventory, which is an incredible opportunity for sellers to get top dollar and favorable terms. For buyers, the market is undeniably tough—but not impossible. Whether you are buying or selling, having an expert in your corner is the only way to come out ahead in this climate.

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What Defines a Seller’s Market—And How Can a Buyer Compete?

The “6-Month Rule”

Why Is Inventory So Low?

How to Compete (and Win)

The Bottom Line