Real estate is property consisting of land and the buildings on it, such as homes, apartments, retail space and commercial offices. It also includes any natural resources within a property’s boundaries, such as minerals and water. The real estate market is made up of the supply and demand for these properties, which are driven by a number of local and general factors.
Economic growth, for example, can increase real estate demand by increasing the incomes of individuals in a region. This, in turn, can lead them to buy more homes or shop at more stores. It can also cause people to change jobs, which may drive demand for office space. And it can push interest rates down, which will make mortgages more affordable for homebuyers and could encourage new construction.
As a result, the real estate market is affected by many of the same factors as any other market. If supply is greater than demand, prices will fall. But when demand is higher than supply, prices will rise. This is the basic principle behind the stock market and the bond markets, as well as the real estate market.
Understanding these factors is important for anyone who wants to invest in real estate or sell their own property. It can help you predict trends in the market and anticipate when it’s a good time to buy or sell. It can even help you position yourself as a knowledgeable, well-rounded real estate agent who can offer clients the best possible advice.