The real estate market is no different from any other commercial market. It responds to supply and demand and numerous factors effect it, such as interest rates, the economy, business confidence, the level of employment, political stability and immigration.
Periods of high buyer demand are called a seller's market. Values increase, houses sell more quickly, and buyers have fewer homes to choose from. The negotiating power rests more with the seller in the market.
In a buyer's market, there is less demand for properties. Buyers have more properties to choose from, values are stable or may even decline, and sellers have to compete with each other to attract buyers. In this market homes will often take longer to sell and the negotiating power usually rests with the buyer.
In a balanced market, neither buyers nor sellers have a noticeable advantage.