Market Liquidity

For every market to work effectively, it needs market liquidity. This means that there needs to be an equal number of buyers and sellers for the market to work at it's best.

In property, when a market is working at it's busiest, is when the market is at it's most fluid. This is the time when the average length of time between placing a property on the market and getting it sold could be around 6 weeks - fast by most standards: It's at these times that you might get an offer in a day or two!

The market becomes very illiquid when there are few sellers or buyers and no sales occur. A great example of this is when there are falling property prices, there's a credit squeeze etc. Sellers just are not able to sell their houses.


It can be said to be a seller's market when the seller has buyers chasing his property. In other words, credit is readily available, and the market is in it's ascendancy. Conversely, a buyer's market is where the buy has the odds stacked in his/her favour: there would be a lot of property on the market and buyers have a choice as to which property to choose from.

The extremes of the property market are such that it makes moving for regular families very difficult. So that if a family generally live in one area and need to move to another for work for example, it may be difficult to move if the market is against them. In cases like these, renting is the only other solution.

Return from Market Liquidity to House Prices