What is a key difference between a seller’s market and a buyer’s market?

A key difference between a seller’s market and a buyer’s market lies in the relationship between supply and demand. In a seller’s market, the demand for properties exceeds the available supply. This imbalance often leads to competitive bidding and, as a result, can drive up property prices. Sellers have the advantage because buyers are eager to purchase in the limited inventory, which may lead to homes selling quickly and often above the asking price.

Conversely, in a buyer’s market, the supply of properties surpasses the demand. This situation gives buyers more negotiation power, leading to lower prices and more favorable terms. Properties may sit on the market longer as buyers have more choices and can afford to be more selective. Understanding this dynamic is essential for both buyers and sellers, as it significantly influences pricing strategies and buying tactics in real estate transactions.