Jennene Knerr-Shanholtz

Is it a buyer's or seller's market?

Real estate is all about supply and demand. If there are only a few houses for sale, buyers have to compete for the available homes, making it a seller's market. When hundreds of homes are on the market, house hunters dictate the market value, making it a buyer's market.

"A general rule of thumb is if there are six months of available inventory on the market, it's a neutral market. Less than six months is a seller's market, more than six months is a buyer's market," says Jay Thompson, designated Broker at Thompson's Realty in Phoenix, Ariz.

For example, let's say you own a typical 3-bed, 3-bath, 2-story home, and 50 similar homes are sold about every three months in a your area.   "If the market shows that there are 50 similar homes for sale, you should be able to sell at a competitive price within three months, explains Leslie Sellers, president-elect of The Appraisal Institute and appraiser in Knoxville, Tenn. "However, if there are 1500 of those homes on the market, you might have to reduce the price to sell it in three months."