What characterizes a buyer's market in real estate?

A buyer's market in real estate is characterized by an excess of sellers compared to the number of interested buyers. This imbalance creates favorable conditions for buyers, as they have a larger selection of properties to choose from and can negotiate better terms, including lower prices or additional perks such as repairs or closing costs covered by the seller. When there are more homes for sale than there are buyers, sellers may be more willing to adjust their asking prices and terms to attract buyers, enhancing the overall negotiating power of purchasers in the market.

The other options describe conditions that are typically seen in a seller's market or in a more stable market. High demand and bidding wars (the second option) typically characterize a seller's market where buyers compete for limited properties. Stable prices (the third option) suggest a balanced market where supply meets demand but do not indicate a buyer's advantage. A decrease in interest rates (the fourth option) can indeed stimulate buying activity but is not a defining characteristic of a buyer's market specifically, as lower rates might occur in either type of market without indicating an excess of inventory.