Supply and Demand in Real Estate

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What does 'supply' refer to in the context of real estate?

The effect of increased demand on property prices
The quantity of property that individuals desire to purchase or lease
The amount of buyers and tenants who wish to acquire property
The amount of property available for sale or lease (correct)

How does an increase in supply affect property prices?

Prices tend to rise
Prices remain constant
Prices tend to decrease (correct)
Prices fluctuate randomly

What leads to the construction of additional supply according to the cycle of supply and demand?

Unfulfilled demand (correct)
Market equilibrium
Oversupply
Decrease in demand

Which factor can lead to construction ceasing until market equilibrium returns?

Oversupply (C) Signup and view all the answers

What happens when demand absorbs the existing supply in real estate?

Leads to unmet demand and starts the cycle anew (A) Signup and view all the answers

In real estate, what determines the price of a property?

The interaction between supply and demand (A) Signup and view all the answers

What factors can influence the supply and demand of real estate?

Accessibility of developable land, construction costs, and governmental regulations (B) Signup and view all the answers

What do increasing building permits indicate in the real estate market?

Decline in vacancy, rising prices, and increasing construction (B) Signup and view all the answers

What concept involves merging adjacent properties to create more value?

Plottage value (B) Signup and view all the answers

How can splitting a property into smaller units affect its overall worth?

It can potentially increase the overall worth (C) Signup and view all the answers

What do declining vacancy rates signify in the real estate market?

Market favorable for buyers/tenants, decreasing prices/rents, and local oversight (C) Signup and view all the answers

Which factor is crucial in determining market dynamics according to the text?

Availability of labor force (A) Signup and view all the answers

What happens to property prices when there is an increase in demand?

They tend to rise (A) Signup and view all the answers

What could be a consequence of oversupply in the real estate market?

Construction ceases (D) Signup and view all the answers

Which factor initiates the cycle of supply and demand in the real estate market?

Unmet demand (C) Signup and view all the answers

In real estate, what does 'demand' primarily refer to?

Amount of buyers and tenants who wish to acquire property (A) Signup and view all the answers

What impact does an increase in supply have on the real estate market?

Construction ceases (A) Signup and view all the answers

How are property prices in the real estate market determined?

By competition between buyers and sellers (A) Signup and view all the answers

What can a decrease in building permits indicate in the real estate market?

A decline in demand or an increase in supply (B) Signup and view all the answers

How do decreasing prices in real estate typically impact supply and demand?

Decreasing demand and increasing supply (A) Signup and view all the answers

What role does local oversight and approval of new developments play in the real estate market?

Controlling the pace of new construction (C) Signup and view all the answers

Which factor is crucial in determining plottage value according to the text?

Merging adjacent properties (B) Signup and view all the answers

What is a potential consequence of a local zoning authority's regulations on real estate development?

Limiting the types of development allowed (B) Signup and view all the answers

How does an increase in interest rates at the federal level likely influence the real estate market?

Impact financing costs and affordability (A) Signup and view all the answers