How to Compete in a Hot Housing Market

Buying a home in a hot real estate market takes patience and perseverance. Having a savvy buyer's agent doesn't hurt, either.

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Written by Kate Wood
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In a hot real estate market, home inventory is low, competition is high and as a buyer, you may feel like you're on an emotional rollercoaster. Although buying a home in a strong seller’s market presents added challenges, it’s still possible to get an offer accepted on a place you’ll love.

What is a hot market in real estate?

To figure out whether a housing market is hot, experts look at how many months of unsold inventory are on the market. This measure tells you how long it would take to sell all the properties for sale if no other homes were built or put up for sale — not a scenario that would really happen, but a helpful gauge of the availability of homes to buy.

Generally speaking, an inventory level of six months is considered balanced between buyers and sellers. Less is a seller’s market; more favors buyers.

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Why is this such a seller’s market?

A shortage of homes for sale and inadequate levels of new construction have kept much of America in a seller's market in recent years. The COVID-19 pandemic exacerbated these trends, with myriad buyers entering the market as fewer sellers were listing homes for sale and new construction was suffering from labor shutdowns and supply chain shortages. Even though homebuilders have picked up the pace since then — completing more than a million new single-family homes in 2023 — there are still more would-be buyers than available houses.

According to the National Association of Realtors, the U.S. had a 3.5-month supply of existing homes for sale in April 2024, meaning it would take 3.5 months for all those homes to sell at their current pace. (Existing homes are those that were owned and occupied before they were listed, as opposed to new construction.)

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