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How does supply and demand affect real estate?

2019-04-09 Real Estate No comment

Have you ever wondered why, we often witness that in some periods, houses have been overpriced, and sometimes the prices are more reasonable? Why do we sometimes notice the seller's market [buyers more than homes, for sale], and other times the buyer's market [more homes, for sale, qualified, potential buyers]? In economics, there is supply and demand theory, which states that pricing is directly related to supply and demand. If there are more buyers [qualified] than sellers, the price usually rises and the rest of the house will continue. When we take the opposite situation, we usually notice that the price falls and the house takes longer to sell. Of course, we often, witness, between the two, we think this is a balanced or normal market. Unless you have a crystal ball you can trust, it's often hard to predict, far from predicting what will happen.

1. from

Large supply and low demand: from

 If the available home supply is high and the demand is relatively low [very few qualified buyers], the buyer has an advantage and is often more successful in negotiating. This combination is usually about the best buyer market!

2. from

Large supply and large demand: from

 If there is a large supply of housing and many qualified potential buyers to choose from, we have a balanced or normal market and competitive position.

3. from

Supply is in short supply, demand is large: from

 When the number of qualified buyers is greater than the house, available on the market, we often, witness, the seller's market. It depends on the specific housing and local real estate market, as well as the fast, rising prices and even the potential for bidding. In the meantime, in order to create a competitive advantage, you will often witness a larger down payment, cash transactions, unsecured – emergency scenarios.

4. from

Low supply and low demand: from

 Sometimes, only a few sellers and a limited number of buyers, in each case, need skilled real estate professionals to distinguish between specific homes rather than competitors.

Smart real estate agents discuss these possibilities with their clients so they can prepare for the consequences and impact of each individual. When doing so, the trading period becomes less – the pressure is high, and the homeowner realizes that the change may happen soon, without prior notice. Beware of factors such as changing interest rates, consumer confidence and other economic indicators that may be brought about!

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