Buyer's Market

DEFINITION of 'Buyer's Market'

A situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations. Buyer's Market is commonly used to describe real estate markets, but it applies to any type of market where there is more product available than there are people who want to buy it. The opposite of a buyer's market is a seller's: market a situation in which demand exceeds supply and owners have an advantage over buyers in price negotiations.

BREAKING DOWN 'Buyer's Market'

During the housing bubble of the early-to-mid 2000s, the real estate market was considered to be a seller's market. Property was in high demand and was likely to sell even if it was overpriced or not in the best condition. In many cases, homes would receive multiple offers and the price would be bid up above the seller's initial asking price. The subsequent housing market crash created a buyer's market in which sellers had to work much harder to generate interest in their properties. Buyers expected homes to be in excellent condition or priced at a discount and could often secure a purchase agreement for less than the seller's asking price for the property.

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