Definition of Soft market:
A soft market can lead to rapid drops in prices as sellers compete to find buyers. Prices will fall as the excess of supply over demand increases. For example, assume that 20 houses are put up for sale and 15 possible buyers enter the market. Five of these houses will not be sold, assuming each buyer purchases one house. This forces the 20 house sellers to compete on price to attract a buyer. As a result, this type of housing market is called soft.
A soft market is a market that has more potential sellers than buyers. A soft market can describe an entire industry, such as the retail market, or a specific asset, such as lumber. This is often referred to as a buyer's market, as the purchasers hold much of the power in negotiations.
Situation where goods are plentiful but demand is scarce, therefore buyers can dictate the prices to suit their estimate of value. Also called buyers market. Opposite of hard market.
How to use Soft market in a sentence?
- Sellers compete among themselves to provide goods and services to buyers.
- A prolonged soft market in multiple industries can lead to a recession.
- A soft market has more sellers than buyers and low prices.
Meaning of Soft market & Soft market Definition