A Practical, Real-World Explanation Based on Data, Experience, and Strategy

This is one of the most searched real estate questions in Canada, yet it’s also one of the most misunderstood. Most explanations are overly simplistic, headline driven, or disconnected from how real negotiations actually unfold.

After working through extreme buyer’s markets and intense seller’s markets, and helping clients on both sides succeed in each, here’s the explanation homeowners and buyers actually need.

Why This Question Is More Complicated Than It Sounds

The first thing to understand is this.
There is no single market.

Every real estate decision should be based on local data, not national headlines. Never use national or even provincial statistics to decide when or how to buy or sell. Real estate is hyper-local.

Days on market, local economics, neighbourhood desirability, housing type, and even lifestyle appeal all affect outcomes. Two neighbourhoods in the same city can be in completely different markets at the same time.

How Buyer’s and Seller’s Markets Are Actually Defined

The most reliable metric is months of inventory. This measures how long it would take to sell all current listings if no new homes were added.

Here is the general rule of thumb:

• Up to 3 months of inventory. Seller’s market
• 4–6 months of inventory. Balanced market
• 6+ months of inventory. Buyer’s market

How Months of Inventory Is Calculated

1. Count the total number of active listings in the specific market or segment
2. Determine how many homes sold in the last month, or use a 12-month average
3. Divide active listings by average monthly sales

This data gives context. It does not guarantee outcomes.

The Biggest Misconception About Buyer’s vs Seller’s Markets

The most common misconception I hear is this.
In a buyer’s market, sellers will accept low offers.

In reality, negotiations are driven far more by seller motivation than market labels.

Buyers often see long days on market as leverage. Sellers often see it as irrelevant if they are not motivated to sell. A home sitting longer does not automatically mean a discount will be accepted.

Market conditions influence leverage. Motivation determines results.

A Real Example. When the Market Was Misread

I’ve worked with many buyers moving from out-of-province buyer’s markets into strong seller’s markets. They approached offers the way they were used to. Low risk, conditional, conservative.

They lost repeatedly on homes they loved.

It wasn’t until they accepted the local data, not their past experience, that outcomes changed. The power position had shifted, and strategy needed to shift with it.

When Strategy Matters More Than the Market

I’ve worked in both extremes.
A market with 22 months of inventory and another with 5 days of inventory.

In seller’s markets, buyers who understand seller motivation can still win. Price is not always the top priority. Sometimes speed, certainty, or conditions matter more.

I’ve seen sellers choose an offer $95,000 below the highest bid because the buyer could close faster and had financing fully in place.

In strong buyer’s markets, sellers can still succeed with the right preparation. Home staging aligned with buyer expectations for that area and property type can dramatically improve results. Pre-home inspections reduce uncertainty and prevent deals from collapsing after conditions.

Strategy consistently outperforms assumptions.

How Buyer Behaviour Changes Between Markets

In buyer’s markets, buyers gain time.
They revisit homes, view more options, think longer, and negotiate cautiously.

In seller’s markets, buyers must prepare in advance.
Pre-approval with written confirmation matters. Offers need to be clean, timely, and aligned with what the seller values. Sometimes that means writing immediately after a showing. Sometimes it means writing above ask. Occasionally, a personal letter has tipped the scales.

Buyers do not control inventory. Sellers do. Buyer behaviour must adapt accordingly.

How Seller Behaviour Can Help or Hurt Outcomes

Sellers often hurt themselves in seller’s markets by assuming preparation doesn’t matter. Demand alone does not guarantee results. Poorly prepared homes sit longer, receive weaker offers, and eventually face price reductions.

In buyer’s markets, sellers often get stuck on list price. List price is hypothetical. Value is determined by what buyers are willing to pay in that moment, in that location, for that type of home. Ego is one of the most expensive mistakes sellers make.

Advice That Applies in Every Market

Every property must be evaluated individually.

Neighbourhood data, finishes, layout, lifestyle appeal, and buyer demand for that specific product matter more than broad market labels. No two homes are identical, and no strategy should be copied blindly from another listing.

How Media Headlines Distort Market Reality

Media coverage tends to generalize. National and provincial averages mask local realities. Even city-wide averages can be misleading.

A small number of high-end sales in one month can skew averages dramatically. Median prices and larger data sets provide a clearer picture. Understanding how many homes were included in the data matters as much as the numbers themselves.

Headlines drive emotion. Data should drive decisions.

The Better Question to Ask

Instead of asking, “Is it a buyer’s or seller’s market?”
A better question is:

Why do I want to buy or sell, and what is happening in the specific neighbourhood and property type I care about?

Motivation, lifestyle goals, timing, and local data matter more than market labels. It is always a good time to buy or sell when the right reasons are present and the strategy aligns with reality.

The bottom line.
Buyer’s markets and seller’s markets describe conditions, not outcomes. Understanding motivation, preparation, and local data is what actually determines success.