Whether you’re in a major metro market or a small town and regardless of the country, the economy, or even the day and age in which you’re doing business, when you’re in the field of real estate, three core rules apply to your business:
Real estate is governed by the law of supply and demand.
his rule is absolute and without exception. The appreciation of a market, the expectations of buyers and sellers, and the velocity of market sales are all dictated by the supply of — and the demand for — real estate for sale.
As a recent example
agents saw rapid appreciation and a frenzied response by buyers in the U.S. real estate market in the years 2002-2005. This response was caused by the fact that demand for real estate was at an all-time high while the supply was limited. This supply and demand caused rapid appreciation, with home sellers receiving multiple offers within days or even hours. At one time during that period, homes in southern California were selling, on average, at 18 percent above the listed price — the result of a market condition where demand outstripped supply.
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