seller's market

noun
Updated on: 26 Jul 2017

Definition of seller's market

  1. :  a market in which goods are scarce, buyers have a limited range of choice, and prices are high — compare buyer's market

First Known Use of seller's market

1932


Financial Definition of SELLER'S MARKET

seller's market

What It Is

A seller's market exists when there are more sellers than buyers in the market for a certain good or service.

How It Works

Housing is a common place to find a seller's market. Let's say that ABC Town has 100,000 homes and that 3,000 of those homes are for sale. A big manufacturing plant in ABC Town is opening, drawing thousands of people to the town for new jobs. These people want to buy houses and move to ABC town, so they start competing for the 3,000 houses for sale.

Very few people are moving out of ABC Town right now. Accordingly, the few people who are interested in selling a home in ABC Town have the upper hand. There are more buyers than sellers, making ABC Town a seller's market.

Why It Matters

In a seller's market, a seller often can sell goods and services at a higher cost. In our example, a seller's market means that a lot of buyers are competing for houses, and they are therefore more likely to pay more money for their homes. This can translate into big profits for sellers, who might also be able to dictate other terms of the deal (such as who pays the closing costs).


SELLER'S MARKET Defined for English Language Learners

seller's market

noun

Definition of seller's market for English Language Learners

  • : a situation in which few things of the same kind are for sale, prices are high, and sellers have an advantage over buyers

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