Which situation describes a seller's market?

In a seller's market, the dynamics of supply and demand favor the sellers. This occurs when there are more buyers than available homes on the market. As the number of interested buyers exceeds the number of homes for sale, it creates a competitive environment where buyers may bid against each other. This competition often results in increased home prices since buyers are willing to pay more to secure a property.

Understanding this concept is crucial for recognizing the impact of market conditions on real estate transactions. In contrast, other scenarios, such as having more houses for sale than buyers or high vacancy rates, indicate situations that would typically lead to a buyer's market, where sellers may have to lower prices to attract buyers.