What does it mean when a market is described as 'seller's market'?

When a market is described as a 'seller's market', it specifically refers to a condition where demand for properties exceeds the available supply. This imbalance creates a scenario in which sellers hold a stronger position in negotiations, allowing them to be more selective about potential buyers and to ask for higher prices due to the increased competition among buyers.

In such conditions, homes often sell quickly, multiple offers can be placed, and buyers may even engage in bidding wars to secure a property. This contrasts sharply with other market conditions, such as a buyer's market, where the supply of available homes surpasses demand, putting pressure on sellers to reduce prices or offer incentives to attract buyers.

Understanding this concept is crucial for both buyers and sellers in the real estate market, as it influences strategies and expectations during the buying and selling process.