Buyer's Market

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Subject Offer

    Subject offers are intended to be purely informational in nature. ...
  2. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  3. Break

    A term used in futures markets to describe a rapid and sharp ...
  4. Bulge

    A fast increase in a security's or commodity's trading price. ...
  5. Buoyant

    The term used to describe a commodities market where the prices ...
  6. Arm's Length Market

    A financial market consisting of parties that have no relationship ...
Related Articles
  1. Sector Rotation: The Essentials
    Fundamental Analysis

    Sector Rotation: The Essentials

  2. Digging Deeper Into Bull And Bear Markets
    Active Trading Fundamentals

    Digging Deeper Into Bull And Bear Markets

  3. Need Retirement Income? Sell Your House!
    Options & Futures

    Need Retirement Income? Sell Your House!

  4. What You Need To Know About Fannie Mae ...
    Investing Basics

    What You Need To Know About Fannie Mae ...

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center