what is a buyer s market 
a buyer s market is an environment that favors buyers over sellers it typically develops when changes to the underlying economic conditions that shape supply and demand mean that purchasers have an advantage over sellers in price negotiations understanding a buyer s marketa buyer s market is created by market conditions that favor buyers over sellers anything that increases the urgency of sellers to sell or decreases the urgency of buyers to buy contributes to a buyer s market a buyer s market usually means that prices are lower either because buyers have more leverage to negotiate with sellers or because sellers must set lower prices to attract buyers in terms of economic theory this can be described using the law of supply and demand which states that a supply increase amid constant demand or a decrease in demand with constant supply will put downward pressure on prices factors that can increase supply include factors that can decrease demand meanwhile include by changing the shape of supply and demand in a way that implies a lower market equilibrium price these factors can create an advantage for buyers to negotiate for lower prices the term buyer s market is commonly used to describe real estate markets but it applies to any type of market in which 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 an environment in which supply is low and or demand is high giving sellers an advantage over buyers in price negotiations buyer s market characteristicsin a real estate buyer s market houses tend to sell for less and sit on the market for a longer period of time before receiving an offer more competition in the marketplace occurs between sellers who often must engage in a price war to entice buyers to make offers on their homes a seller s market by contrast is characterized by higher prices and shorter sales times rather than sellers competing to attract buyers the buyers compete against one another for the limited supply of homes available consequently bidding wars between buyers often transpire in a seller s market resulting in homes selling for more than their list prices buyer s market exampleduring the housing bubble of the early to mid 2000s the real estate market was considered a seller s market properties were in high demand and likely to sell even if they were overpriced or in poor condition in many cases a home 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 a seller had to work much harder to generate interest in their property a buyer expected a home 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 