According to dictionary.com, â€œthe relationship between supply and demand determines the price of a commodity. This relationship is thought to be the driving force in a free market.â€
In real estate, supply and demand is represented as the current monthâ€™s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).
Most real estate professionals know, or at least have a good idea of, the monthâ€™s supply of inventory in their market. But why? Because of its effect on pricing moving forward.
While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline by which to go:
When you discuss home values with either a seller or buyer, you should be prepared to show what the supply of, and demand for, homes is in the same category of home they are thinking of selling or buying. You should also be prepared to discuss any projected change in those numbers (such as a potential shadow inventory of distressed homes or a projected increase in demand because of a new plant opening).
Roland Lorans and Jacky Arias are Real Estate agents at Keller Williams,
covering the greater Metro Atlanta Buford Dacula Georgia area.
Phone: 770-866-2561 or 678-717-9048 Email Us
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Roland Lorans and Jacky Arias are Experts in short sales in the Metro Atlanta Georgia area. We are your Atlanta Buford Dacula Georgia Short Sale Specialist Realtors and Atlanta Georgia loan modification and distressed property expert.
This article and content is for general informational purposes and may not be accurate. This should not be taken as legal advice, technical or tax advise under any circumstance. Seek legal advise and representation in all legal matters.