The real estate market like any other is affected by the demand and supply of goods and services. The persons who are setting the trends in the market, has to factor in on what the consumer wants at any given time and how much they are willing and able to pay for that product. The real estate market is not different from any other markets and is also affected by the demand and supply factor.
Whenever the supply and demand equilibrium of a real estate market is upset by excess supply, a buyers' market develops. The number of excess units in that particular market allows a potential buyer to shop among very anxious owners or sellers to obtain better prices and for the best terms. When this condition exists, the more intelligent builders may well stop building because of the lack of profit and will result from excess supply.
On the other hand, when an excess demand exists, it is a natural result of short supply, and this condition creates a sellers' market. This allows sellers to demand higher prices from buyers who are forced to compete for whatever space is available. More building again takes place until oversupply occurs once more.
The average real estate salesperson and broker would like some sort of dependable reference guide to help interpret market conditions. There are several indicators that help to clarify what the market is doing. Three of the more important indicators are:
1. Supply of existing unsold houses and apartments;
2. Occupancy or vacancy ratios; and
3. Number, prices, locations and types of houses sold.
Existing Supply - Due to the immobility of property, the supply side and the demand side of the market cannot be brought into equilibrium by relocation. Therefore, when demand drops for any reason, inability to withdraw existing supply from the market will result in an oversupply. A buyer's market often results until the oversupply is reduced. Since prices received by builders must exceed total costs of construction, a buyers' market will cause a drop in construction until the inventory of unsold houses is reduced.
Occupancy or Vacancy Ratios - Occupancy or vacancy ratios in rental properties reflect the market in the same manner as unsold housing inventory. An increase in vacancy rates indicates a surplus of housing and apartment’s space, generally in rental units and homes for sale. For example, a five percent vacancy rate (95 percent occupancy rate) indicates a healthy housing market.
One of the first indications of a revived real estate market has always been an increase in rental occupancies that cannot be attributed to reduced rents: High occupancy rates lead to increased rents; increased rents lead to new construction and a revived real estate market.
Houses Sold - In the United Stated there are many ways to collect information on the number and prices of homes sold during the recent past.
Ann Marie Massoud is a Real Estate - Salesperson licensed to practice in California.
As a buyer’s broker Ann Massoud enables you to have a smooth transaction by starting her process by listening to what the buyers are looking for and then asking them well planned questions to help buyers realize their search focus. It is no wonder that Massoud's past buyers have continuously referred their family and friends to her.
As a seller’s broker, Ann Massoud understands the trends in the ever changing Real Estate market place when she represents you in the selling of your property. Massoud has consistently maximized each seller’s Real Estate investment and achieved record-breaking prices by using her unique and creative marketing plans. As an active and aggressive agent, she will always position your property ahead of the current Real Estate curve so you will have more money in your pocket in the end.
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