Supply and Demand

Buying a home, whether newly built or an older home is a major decision that is affected by a variety of influences.   If a persons plans properly for this investment and pays attention to the supply and demand of the home market, they could get a home with more bang for the buck.

In other words, if you look for a home during a time when homes have an availability rate that is higher than normal, this means that the demand for the home will be lower and it will be easier to get it at a lower cost to you the consumer.   If you are looking in an area where there is a high demand for people wanting to live, you will not be as beneficial from the market as looking to a location that has a low demand for people looking to purchase.   For example, if you are looking to purchase a home in a major metropolitan area and do not want to have the requirement of traveling from the “city” to your home, you will pay a higher price for your home to have the convenience of living in the city versus a rural location.   If you look for a home that is in a 30 mile radius of the city, you will find the purchase prices for the homes to be lower and usually incorporate more land, larger home, etc.

Basically the supply and demand for home purchasing means that if there are more sellers than buyers, you should be able to purchase a home for less money than if there are more buyers than sellers. In slow markets homes stay on the market longer and the price of homes may fall.   If there are more buyers than sellers then the competition for homes becomes greater and prices can start to go up.

There are many ways to determine the real estate market.   How active new construction is, is a fairly solid way to measure the state of affairs in the real estate industry.   Most of the time you will find the cost of construction often runs parallel with the cost of real estate. As construction costs rise, the price of homes also go up.   This is true if the construction costs decline, so will the...