This week’s questions comes from a home seller in Towngate.

So who has the upper hand right now, buyers or sellers?

It's a fair question, especially in a market like Pembroke Pines where conditions shift fast. Everyone wants to know if they're walking into a feeding frenzy or a negotiator's paradise.

But here's the thing: most people are looking at the wrong signals.

Days on market? Important, but incomplete.

Median price changes? Helpful, but not the full picture.

To really answer this question, we need to talk about absorption rate, the best kept secret in understanding who's in control.

Let me break it down.

When people say it's a "buyer's market" or "seller's market," what they're really talking about is supply and demand and how many homes are available vs. how quickly they're being snapped up.

Here's how it typically breaks down:

Seller's Market: Fewer than 3 months of inventory. Homes sell quickly, often with multiple offers. Sellers have leverage. Buyers compete.

Neutral Market: 3–6 months of inventory. Balanced. Buyers have options, but sellers still have leverage. Negotiations are more reasonable.

Buyer's Market: More than 6 months of inventory. Homes sit longer, buyers negotiate harder. Sellers adjust expectations or wait it out.

But how do we measure that in real time? Enter: absorption rate.

Absorption rate tells us how quickly homes are being "absorbed" (aka taken off the market) based on recent demand. It's expressed in months of inventory or how many months it would take to sell all current listings at the current pace.

The formula:

Months of Inventory = Active Listings ÷ Pending Sales (per month)

We use pending sales instead of closed sales because pendings reflect real time activity, what just went under contract in the last 30 days, not what closed weeks or months ago.

Closings are history. Pendings are the market's current temperature.

Let's say there are 100 active listings in Pembroke Pines and 50 homes went pending in the past 30 days:

100 ÷ 50 = 2 months of inventory

That means at the current pace, it would take 2 months to sell all available homes. A strong, seller leaning market.

Now let's flip it:

If there are 100 active listings and only 20 homes went pending:

100 ÷ 20 = 5 months of inventory

That means it would take 5 months to sell all available homes at the current pace. A slower, more balanced market.

The lower the months of inventory, the faster homes are moving. The higher the number, the more inventory is piling up.

Here's how to read months of inventory like a pro:

Less than 3 months of inventory: Strong seller's market. Homes moving fast. Buyers competing. Sellers have leverage.

3–4 months of inventory: Neutral to slight seller advantage. Homes moving steadily. Buyers have options but sellers still control pricing.

4–6 months of inventory: Neutral to slight buyer advantage. Homes sitting longer. Buyers can negotiate. Sellers need to price right.

More than 6 months of inventory: Buyer's market. Inventory piling up. Homes sitting 60+ days. Buyers have serious leverage. Sellers adjusting expectations.

This is the clearest way to understand who has the power at any given moment.

Based on recent data:

Active Listings: Approximately 1,040 homes on the market

Pending Sales (last 30 days): Approximately 150–180 homes went under contract

Months of Inventory: 1,040 ÷ 165 = 6.3 months

What this means:

We're in a buyer's market right now. At the current pace, it would take over 6 months to sell all available inventory. That's well above the 3 month threshold for a seller's market and it signals homes are sitting longer, buyers are more selective, and sellers need to price strategically to stand out.

Compare this to a year ago when Pembroke Pines had closer to 2–3 months of inventory. The market has cooled significantly.

If you're a buyer right now, you have more power than you've had in years.

Here's what 6.3 months of inventory gives you:

More time to shop. With over 6 months of supply on the market, homes aren't flying off shelves in 30 days. You can tour multiple properties, compare options, and make informed decisions without the panic.

More negotiating power. Sellers know inventory is piling up and homes are sitting longer. They're more willing to negotiate on price, repairs, closing costs, and contingencies.

Less competition. You're not racing against 10 other buyers on every property. Multiple offer situations are rare right now.

Better chance at inspection contingencies. When the market was hot (under 3 months of inventory), sellers rejected inspection contingencies outright. Now? They're standard again.

The move for buyers:

Don't rush. Don't overbid. Make fair, data driven offers based on real comps. If a home has been sitting 60+ days, you have serious leverage, use it.

Watch for homes that have been sitting 60, 90, 120+ days. Those sellers are feeling the pressure and are often more motivated to negotiate.

If you're a seller right now, you need to understand the reality: homes aren't selling themselves anymore.

With 6.3 months of inventory, that means:

Your home is competing with 1,040 other listings. You're not the only option anymore. Buyers have choices, lots of them.

Overpricing will kill you. If your home is overpriced by even 5%, it will sit, and the longer it sits, the more leverage buyers have.

Presentation matters more than ever. Professional photos, staging, repairs, curb appeal aren't optional. Buyers are pickier now because they can be.

Days on market are climbing. Homes are taking 59+ days to sell (median). If yours is sitting longer than 60 days, you're overpriced. Period.

The move for sellers:

Price aggressively from day one. Generate immediate interest. Create urgency. Let buyers compete against each other, not against you.

If your home has been sitting 45+ days with no offers, you're overpriced. Don't wait for the market to come to you, it won't. Price cuts signal desperation. Price right initially and you'll sell faster and for more money.

Here's why months of inventory is more useful than just watching median prices:

Median prices lag. They reflect what closed 30–60 days ago, not what's happening today.

Months of inventory is forward looking. It tells you what's happening right now and how fast current inventory is moving.

Median prices don't account for inventory shifts. A drop in median price could mean the market crashed… or it could just mean more mid priced homes sold that week. Months of inventory tells you the real story.

Example:

Let's say median price drops $50K in one week. Scary, right?

But if months of inventory stays at 2–3 months, it means homes are still moving fast. The price drop was just an inventory mix shift (more affordable homes sold).

Now let's say median price stays flat, but months of inventory jumps from 3 to 6.5 months. That's a real problem, inventory is piling up, demand is slowing, and sellers are about to feel it.

Months of inventory cuts through the noise and tells you who has leverage.

If you're a buyer:

Watch for months of inventory above 6 months. That's when you have maximum leverage. Don't be afraid to negotiate hard on price, repairs, and contingencies.

If months of inventory drops below 4 months, the market is heating up so act faster, be more competitive.

If you're a seller:

If months of inventory is above 6 months (like now), you MUST price aggressively. Don't test the market. Price to sell immediately.

If months of inventory drops below 3 months, you can price closer to market value and still generate competition.

If you're an investor:

High months of inventory (above 6) means motivated sellers and longer days on market, perfect for finding deals.

Low months of inventory (below 3) means competition is fierce and you'll need to move fast and pay closer to asking.

Based on current inventory trends, here's where we could be headed:

Scenario 1: Months of Inventory Stays Elevated (Most Likely)

If inventory stays high and pending sales stay steady:

What this means: We stay in a buyer's market for the next 60–90 days. Sellers need to adjust expectations.

Scenario 2: Inventory Drops Quickly (Less Likely)

If pending sales surge (200+ contracts/month) while new listings slow:

What this means: The market heats back up. Buyers need to act faster. Sellers can price more aggressively.

Scenario 3: Inventory Surges Further (Possible)

If new listings surge above 80/week while pending sales drop below 120/month:

What this means: Deep buyer's market. Sellers panic. Deals take 90+ days. Significant price reductions become common.

My bet? We're staying in Scenario 1 for the next 30–60 days. Inventory will stay elevated, pending sales will remain steady but selective, and months of inventory will hover in the 5.5–7 month range.

Right now, Pembroke Pines is in a buyer's market with 6.3 months of inventory. That's the highest we've seen in years.

Prices are pulling back slightly, days on market are rising, but homes are still going under contract, just more selectively. It's not the feeding frenzy we saw a year ago (when we had 2–3 months of inventory), but it's also not a deep freeze.

So is it a buyer's or seller's market?

It depends where you're standing.

If you're a seller pricing right and presenting well, you're still in the game but you need to be strategic, aggressive, and realistic. The 3 month seller's market window has closed.

If you're a buyer, you're getting breathing room and that's a big win after the chaos of the past two years. Take your time. Negotiate confidently. Don't rush.

Want to know what months of inventory looks like in your neighborhood? Shoot me the zip code and I'll break it down.

Have a question for next week's Ask Mike? Hit reply and ask. I answer every one.