What is a "buyer’s market" in real estate?

A "buyer’s market" in real estate refers to a situation in which the supply of available properties exceeds the demand from potential buyers. This imbalance creates favorable conditions for buyers, as they have more options to choose from and typically more negotiating power. In a buyer’s market, sellers may have to reduce prices or offer incentives, such as covering closing costs or providing repair credits, to attract prospective buyers.

This condition often occurs when there is an oversupply of homes for sale, which may arise from factors like economic downturns, increased construction of new homes, or shifts in demographic trends. As a result, buyers are more likely to secure better deals and favorable terms when purchasing properties.

Other options describe market situations that either favor sellers or depict neutrality, which would not qualify as a buyer’s market. For instance, when demand exceeds supply, it creates a seller’s market, where buyers may face competition and higher prices. A market plateau with equal demand and supply indicates a balanced market, which does not favor one group over the other. Additionally, referencing foreclosures specifically does not encapsulate the broader market condition of supply and demand that defines a buyer’s market.