hen applied to real tastes and preferences of people.
estate, the principle of On the supply side, one must look
supply and demand refers at the available supply of real
to the ability of people to pay estate housing and its relative
for housing coupled with the scarcity. When the supply of real
relative scarcity of real estate. estate housing property is
For any type of good or service limited and demand is great, the
to have value in any marketplace, result is rising land or housing
it must possess four property value prices.
characteristics: demand, utility, Conversely, where land is
transferability and scarcity. abundant and there are relatively
Demand is a need or desire few buyers, housing supply and
coupled with the purchasing power demand will be in check or
to fill it, whereas utility is balanced at only a few cents per
the ability of a good or service square foot.
to fill that need. Scarcity means
there must be a short supply The principal of change serves as
relative to demand. Air, for a reminder that real property
example, has utility and is in uses are always in a state of
demand, but it is not scarce. change. Although it may be
Finally, a good or service must imperceptible on a day to day
be transferable to have value to basis, housing supply and demand
anyone other than the person change can easily be seen when
possessing it. longer periods of time are
considered. Because the present
In evaluating a property's value value of property is related to
or potential worth, attention its future uses, the more
must be given to such matters on potential changes that can be
the demand side as population identified, the more accurate the
growth, personal income, and the estimates of its present worth.
About the Author:
With twenty plus years experience as a real estate agent, appraiser and real estate investor TJ Nelson, Refinancing Advisor, provides the tools for people with bad credit to acquire the American dream, home ownership.
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TJ Nelson
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