What is meant by a balanced market in real estate terms?

A balanced market in real estate refers to a situation where the supply of properties available for sale is approximately equal to the demand from buyers. This equilibrium means that neither buyers nor sellers have an advantage, which typically results in stable prices. In such a market, buyers feel they have enough options to choose from without overwhelming competition, while sellers can expect fair market conditions for their properties.

When the number of buyers and the number of available properties are roughly equal, it prevents sharp price decreases or increases, leading to a stable real estate environment. This balance can foster healthy negotiations, where properties move steadily without significant pressure from either side.

In contrast, when there are more buyers than properties, it creates a seller's market, where demand drives prices up. Conversely, if there are more properties than buyers, it results in a buyer's market, leading to downward pressure on prices. Fluctuating interest rates can affect overall market conditions but do not define a balanced market; they may contribute to various market dynamics but are not a direct indicator of balance in supply and demand.