How Does Supply and Demand Affect Real Estate?



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Hey there again, thanks for joining me today. Our topic this time is supply and demand.


When we talk about supply and demand, we are talking about the number of homes available for sale relative to the number of buyers out there in the market. As buyers purchase homes, demand for them decreases. Conversely, if we don't have a fresh supply of buyers, the market slows down and homes sit there, stagnant. When homes come off the market, unless we have a fresh supply, things get a little lopsided.

Finally, what actually controls both supply and demand is interest rates. Interest rates demand that either you buy or don't buy. If they are low enough, buyers are going to buy no matter what. I'm not quite sure exactly where we are in the cycle at the moment, but the market is still strong right now.

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