When does a buyer's market typically occur?

When does a buyer's market typically occur?

• A. When supply is low and demand is high
• B. When supply is high and demand is low
• C. When interest rates are low
• D. When prices are increasing

Answer: (B)

A buyer's market typically occurs when supply is high and demand is low. In this scenario, there are more homes available for sale than there are buyers, leading to increased competition among sellers to attract buyers. As a result, sellers may lower their prices or offer additional incentives to make their properties more appealing, which benefits buyers. This environment gives buyers more negotiating power since they have more options available and can drive a more favorable deal for themselves. A market characterized by low supply and high demand, for instance, would be a seller's market, where prices tend to rise due to the lack of available properties. Similarly, low interest rates and increasing prices are indicators of other market conditions, but they do not define a buyer's market. Instead, they could contribute to a more competitive environment if demand is also high. Understanding these market dynamics is essential for buyers and sellers to navigate real estate transactions effectively.

A buyer's market typically occurs when supply is high and demand is low. In this scenario, there are more homes available for sale than there are buyers, leading to increased competition among sellers to attract buyers. As a result, sellers may lower their prices or offer additional incentives to make their properties more appealing, which benefits buyers. This environment gives buyers more negotiating power since they have more options available and can drive a more favorable deal for themselves.

A market characterized by low supply and high demand, for instance, would be a seller's market, where prices tend to rise due to the lack of available properties. Similarly, low interest rates and increasing prices are indicators of other market conditions, but they do not define a buyer's market. Instead, they could contribute to a more competitive environment if demand is also high. Understanding these market dynamics is essential for buyers and sellers to navigate real estate transactions effectively.