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A market situation in which lower prices prevail due to excess supply and a shortage of demand. A buyer's market may occur in one particular sector or across the wider economy. For example, if there are 10 houses in a neighborhood and eight of them are up for sale, it is likely that their prices will race toward the bottom. This means that a prospective homebuyer looking in that area will almost certainly find a good deal on a house. See also: Seller's market.
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A market in which the supply of an asset swamps demand to the point that prices fall below the level expected under normal circumstances. Occasionally, several large new issues of municipal bonds will be marketed at the same time, thereby creating a buyers' market that causes underwriters to raise yields. A buyers' market in municipal bonds results in a narrowing of the gap between the yields on these tax-exempt securities and the yields on U.S. Treasury bonds, which are taxable. Compare sellers' market.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.