Real Estate Parcels are Unique and Finite:
Real Estate Cannot be Moved to Fill Shortages:
Over-supply Means Lower Prices:
Under-supply Means Higher Prices:
Always Remember that Real Estate is a Local Business:
We all read about trends in interest rates, national home price trends, new housing starts and many more economic indicators that influence the real estate markets. It will serve the real estate professional well to keep up with this information, but to always keep in mind that this is a local business. There can be many forces influencing your local market that will have little or no impact in other areas, and vice versa.Supply and demand in real estate isn’t as easy to balance as it is in manufactured commodities. Making more takes time, and there may not be room to make that happen in any given area. You can’t move it to where the buyers are.
Pay careful attention to the factors that influence your local market. If you’re in a market that has industry and a great many relocations for jobs, watch your local businesses and industries carefully for up or down sizing. If your market is resort, vacation or second homes, factors that can have great impact can include the local weather trends, aging of the population, general stock market and investment health, etc. Things that impact discretionary income have more of an influence on this type of market.
In short, keep up with the big picture, but regionalize your primary focus. Supply and demand in real estate will always be a local issue.