What is a buyer’s market in real estate?
When you’re navigating the current housing marketyou may be wondering what it really means to be in a buyer’s market. A buyers’ market exists when there are more homes for sale than active buyers, giving buyers more choices and less competition. With higher inventory levels, softer prices and fewer bidding wars, the balance of power is shifting away from the sellers.
This shift is important for both sides of the transaction. Buyers are often given bargaining power, from obtaining price reductions to asking for repairs or concessions, while sellers may have to adjust prices and expectations to stay competitive. Whether you live in a home in Los Angeles or a apartment in MiamiUnderstanding how inventory, pricing trends, and negotiation dynamics impact your local market can help you determine your next move. In this Redfin real estate article we worked with Michal Clements from Insight to action to explain how a buyer’s market works and what it means for you.
What is a buyer’s market?
There is a buyer’s market when the supply of housing exceeds demand. In these circumstances:
- Houses are selling more slowly
- Price reductions are becoming more and more common
- Buyers have stronger bargaining power
This is the opposite of a seller’s market, where demand exceeds supply and homes often sell quickly at or above asking price. A balanced market is between the two, with relatively stable inventories and prices.
| Buyer’s market | Balanced market | Sellers’ market | |
| Market condition | Supply exceeds demand | Supply and demand are in balance | Demand exceeds supply |
| Price pressure | Down or stabilized; concessions common | Stable | Up; limited concessions |
Because most people don’t buy or sell often, recognizing current market conditions isn’t always intuitive. The average homeowner holds a home for about 12 years, meaning even repeat buyers may encounter very different dynamics than their last transaction.
Signs You’re in a Buyer’s Market
Several measurable indicators can help determine whether conditions are in buyers’ favor:
- Rising stock
- Longer average days on market
- Increased price reductions
- Higher rates for seller concessions
- Growing months of supply
Two additional considerations are important: the difference between visible and less visible indicators, and the variation between local markets.
Inventory levels
Inventory measures how many homes are actively for sale. Rising inventory often indicates reduced competition among buyers.
FRED data (i.e. Federal Reserve economic data from the Federal Reserve Bank of St. Louis) shows that housing inventory counts in the entire US post-COVID declined sharply (over 50%) and reached a low point in 2022 (compared to 2017). As shown in the chart below, housing inventories have risen from these lows in 2024 and 2025. Inventory levels in the first quarter of 2026 have remained approximately the same as in the first quarter of 2025 (9% higher).
What this means is that first-time homebuyers have been faced with a situation where supply is increasing overall since 2023, while returning or experienced homebuyers are facing a situation where the total supply is likely to be less than when they last bought before the COVID-19 crisis, even though supply has increased in 2024 and 2025.
“In Carson City, Nevadawe found that new construction homes were priced similarly to existing properties with similar square footage and condition,” says Michal Clements. “With more new construction coming to market, buyers had more choice and less urgency to act quickly.”
Average days on market
The average number of days a home stays on the market reflects how long it takes for homes to sell. Nationally, this figure has increased in recent years, indicating a slower pace of sales.
A related measure is the share of homes that are under contract within a week. A decline in these “instant sales” indicates fewer bidding wars and less pressure to make quick decisions.
“If only a small percentage of listings go under contract immediately, buyers can afford to be more selective,” says Clements. “That generally reflects weaker demand relative to supply.”
Months supply
Months supply measures how long it would take to sell the current inventory at the current sales rate.
General benchmarks:
- 6 or more months: Buyer’s market
- 4 to 5.9 months: Balanced market
- Less than 4 months: Seller’s market
National figures fluctuate and local conditions vary widely. Buyers should focus on data specific to their metropolitan area and property type.
Price reductions
Price cuts are one of the most visible signs of shifting leverage. A higher share of homes sold below list price may indicate a weakening of seller control.
Homes that stay on the market longer are more likely to experience price declines, especially if they are initially priced above comparable sales.
“In a recent example, a home sold for more than 10% below the original asking price after sitting on the market for several months,” notes Clements. “Allowing time to pass can sometimes strengthen a buyer’s negotiating position.”
Vendor concessions
Seller concessions, such as covering closing costs or offering repair credits, may indicate greater flexibility.
Nationally, a significant portion of transactions now include concessions, although rates vary significantly by metropolitan area. In some cities, more than half of sales involve some form of seller incentives.
“Concessions can be just as meaningful as price reductions,” says Clements. “They maintain top prices while improving affordability for the buyer.”
Visible and hidden signs of a buyer’s market
Some signals, such as longer listing times or price reductions, are easy to identify. Others, such as concession trends or bidding activity, may require insights from a local broker.
Buyers should ask:
- What are the current months of supply in this area?
- Are concessions common?
- How often do multiple offer situations occur?
Understanding both visible and less obvious indicators can provide a clearer picture of actual market conditions.
Variety on the market
Market dynamics differ per region and per property type. Some metro areas have shown stronger signs of buyer favorable conditions than others, while certain segments, such as condominiums, may have greater supply in months than single-family homes within the same market.
These variations underscore the importance of analyzing local data rather than relying solely on national trends.
Comparison of market conditions at a glance
| Buyer’s market | Balanced market | Sellers’ market | |
| Delivery | Exceeds demand | Balanced | Demand exceeds supply |
| Months of supply | 6+ | 4–5.9 | Under 4 |
| Immediate sale | Lower | Moderate | Higher |
| Bidding wars | Less common | Occasionally | Frequently |
| Bargaining power | Buyers | Shared | Salespeople |
How a buyer’s market affects homebuyers
Recognizing favorable circumstances for the buyer can provide strategic advantages.
Potential benefits include:
- More time to compare properties
- Greater chance of unforeseen inspections
- A stronger negotiating position
- More options for concessions
However, risks remain:
- Prices may continue to drop after purchase
- Local economic conditions may weaken demand
- Appreciation may be slower in the short term
Buyers must balance short-term pricing options with long-term affordability and stability.
What happens to house prices in a buyer’s market?
House prices do not move evenly across markets. Some metro areas have experienced price declines from recent peaks, while others have seen stabilization rather than significant declines.
Home values also tend to linger downward, meaning sellers are often reluctant to accept big losses. As a result, adjustments may come through concessions or longer listing times rather than dramatic price reductions.
“Price stabilization is common before significant declines occur,” says Clements. “Sellers often compete through incentives before lowering the list price.”
Buyers should also anticipate slower appreciation in prolonged buyer favorable conditions.
Is it a good time to buy in a buyer’s market?
Whether it is a good time to buy depends on financial willingness and long-term goals.
Positives
- More inventory
- Reduced competition
- Greater bargaining power
Disadvantages
- Potential price declines in the short term
- Higher financing costs
- Broader economic uncertainty
A long-term ownership horizon can help smooth out short-term volatility.
Strategies for buyers in a buyer’s market
Get pre-approved, but avoid rushing
Mortgage pre-approval strengthens credibility even when competition is lower. At the same time, a larger inventory often ensures informed decision-making.
Create data-driven offers
Use comparable sales, days on market, and listing history to determine if a below-listed offer is warranted.
Track inspection contingencies
Conditions favorable to the buyer usually provide scope for retaining contractual protection.
Negotiate repairs and credits
Inspection findings can provide leverage on repair requests or assistance with closing costs.
Focus on total affordability
Evaluate taxes, insurance, HOA fees and maintenance costs in addition to the purchase price.
Strategies for sellers in a buyer’s market
Price competitive
Too high prices can extend days on the market and weaken bargaining positions.
Improve the presentation
Professional photos, presentations and accurate listing descriptions can help capture attention in a competitive inventory environment.
Offer targeted concessions
Loans or interest rate buydowns can attract buyers without substantial price reductions.
Stay flexible
Flexible closing timelines can be attractive to buyers managing contingencies or lease transitions.
Comparison of the buyer’s market versus the seller’s market
Understand whether that is the case is a buyer’s market or a seller’s market can help you set realistic expectations about pricing, competition, and bargaining power before you take your next step.
| Buyer’s market | Sellers’ market | |
| Inventory | High | Low |
| Competition | Lower | Higher |
| Price trends | Stabilizing or declining | Rising |
| Bargaining power | Buyers | Salespeople |
| Buyer behavior | Slower pace, unforeseen events are common | Faster pace, fewer unforeseen events |
| Seller strategy | Competitive prices, concessions | Fixed prices, selective offers |
Understanding whether conditions are favorable for buyers or sellers can help you determine price expectations, negotiating strategy, and timing for your next move.
