In real estate, the terms buyer’s market and seller’s market describe who has the upper hand when it comes to negotiating prices and terms. The difference usually comes down to supply (number of homes for sale) and demand (number of active buyers).
Buyer’s Market
Definition: There are more homes for sale than there are buyers. Supply is high, demand is low.
Characteristics:
Lots of listings to choose from
Homes tend to sit longer on the market
Prices may stagnate or decrease
Buyers have stronger negotiating power (price reductions, closing costs, conditions, etc.)
Example: If listings are up, average prices are down, and days on market are increasing, it’s a sign of a buyer’s market.
Seller’s Market
Definition: There are more buyers than homes for sale. Demand is high, supply is low.
Characteristics:
Homes sell quickly, often with multiple offers
Prices tend to rise
Sellers have stronger negotiating power (fewer concessions, “as-is” sales, bidding wars)
Example: If listings are down, prices are climbing, and homes sell within days of hitting the market, it’s a seller’s market.
A quick way to measure this is the sales-to-new-listings ratio or the months of inventory:
4–6 months of inventory = balanced market
<4 months = seller’s market
>6 months = buyer’s market