What does a "buyer’s market" refer to in real estate?

A "buyer’s market" in real estate occurs when supply exceeds demand. This situation is characterized by an abundance of homes available for sale compared to the number of buyers actively looking to purchase. When there are more homes on the market than there are interested buyers, sellers often have to lower prices or offer additional incentives to attract potential buyers. This dynamic can lead to increased negotiation power for buyers, as they have more options to choose from and can push for better terms. The excess supply puts downward pressure on property prices, which is a defining feature of a buyer's market.

In contrast, a seller's market would be when demand exceeds supply, leading to higher property prices due to competition among buyers. Conditions where supply meets demand would likely yield stable prices, and a market leading to higher property prices typically indicates a seller's market as well. Understanding these dynamics is crucial for real estate professionals, as they can significantly influence buying and selling strategies.