What characterizes a seller’s market in real estate?

In a seller’s market, the defining characteristic is that demand for homes exceeds the available supply. This imbalance creates competitive conditions among buyers, often leading to bidding wars, which can drive home prices higher. When more buyers are seeking properties than there are homes available for sale, sellers have the upper hand, allowing them to command higher prices and more favorable terms.

This situation typically arises during economic growth periods when consumer confidence is high and interest rates are favorable, encouraging buyers to enter the market. Sellers are more likely to receive multiple offers, enabling them to negotiate effectively. Therefore, the primary feature of a seller's market is the strong demand coupled with limited inventory, resulting in higher prices for properties.