What is the Difference Between Buyer’s Market and Seller’s Market?

The difference between a buyer's market and a seller's market lies in the power dynamics between buyers and sellers, which are influenced by the supply and demand of housing inventory.

In a buyer's market:

• There is a surplus of homes and low demand.
• Prices tend to decrease due to less competition.
• Homes stay on the market for longer periods.
• Buyers have more negotiating power.

In a seller's market:

• The supply of available homes is tight, and there is high demand.
• Home prices are on the rise.
• Homes sell quickly.
• Sellers have more negotiating power.

To determine whether it's a buyer's or seller's market, consider the following indicators:

• Inventory: Compare the current inventory of properties with what you've seen before. More homes available indicate a buyer's market, while fewer options generally favor sellers.
• Recent sales: Look at comparable properties in the area that have recently sold. If they sold above asking price, it's likely a seller's market. If the price ended up below ask, it could be a buyer's market.

Comparative Table: Buyer’s Market vs Seller’s Market

Here is a table comparing the differences between a buyer's market and a seller's market:

A buyer's market occurs when there is an excess of homes for sale, leading to lower prices and more frequent seller concessions. In a seller's market, there is a scarcity of homes for sale, resulting in higher prices and more competitive behavior from buyers.