Hawaii Pre-Licensing National Practice Exam 2025 – Your Complete Prep Guide

A seller's market is characterized by low inventory and high demand for homes. When there are fewer homes available for sale than there are buyers actively looking to purchase, this creates a competitive environment where sellers have the upper hand. In such situations, buyers may feel pressured to make quick offers, possibly at or above the asking price, as they compete for limited properties. This dynamic not only drives up home prices but also can lead to bidding wars among potential buyers.

The other factors listed do not align with the definition of a seller's market. High inventory and low demand, for example, would typically lead to a buyer's market, where buyers have more choices and greater negotiating power. High interest rates and limited financing options could restrict buyers' purchasing power, leading to decreased demand and potentially affecting market dynamics negatively. Increased property taxes and homeowner assessments may deter potential buyers, but they do not directly create a seller's market by influencing the balance of supply and demand in the housing market.