Buyer's Market

Also called a soft market, it refers to a market where there are more sellers than buyers, resulting in purchasers holding much of the power in negotiations. The law of supply and demand typically causes the lowering of prices as a result of the excess supply and abundance of goods (such as stocks, housing, etc.) available for sale relative to demand. A buyer's market can occur as a consequence of negative news in the financial markets, a drop in stock prices, or the general recognition in the market that prices are too high. Additionally, overbuilding, population decrease, or an economic downturn often causes a buyer's market.

In contrast to a buyer's market is a seller's market, which is an economic environment where more demand than supply of a product exists. In a seller's market, the ability to set the terms and prices is in the seller's hands.