Supply and Demand – In Your Favor?

It’s a simple factor in market economics… supply and demand dictate pricing.

  • As demand increases, so will prices if supply doesn’t keep up.
  • As demand decreases, so will prices if supply doesn’t follow suit.
  • As supply increases, prices will drop if demand doesn’t keep up.
  • As supply decreases, prices will skyrocket if demand doesn’t drop.

This concept, of course, applies to real estate and is something you, as a home buyer and/or seller, should be keenly aware of at all times. Over the past 2 years, home inventory levels (supply) have been at levels considered ‘unbalanced.’ They’ve been higher than ideal and have created what many call a ‘buyer’s market.’

However, over the past few months, these inventory levels have been steadily decreasing, due in part to the Home Buyer Tax Credit., as evidenced in this chart:

Absorption Rate as of 8/09

To sum it up, here’s the part you should be keenly aware of right now:

An inventory of 5.7 months means sellers are regaining some leverage for negotiating, although buyers still have some advantage.

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Ryan Hukill About Ryan Hukill

I'm the founder and creative Firestarter behind the ShowMeOKC Team. I love this great city and all that's going on here, and really love showing it off and helping to break the age-old stereotypes.

I married up, am Dad to 5, friend to many, motorcycle-junkie, traveler, camper, jeeper, OU & OKC Thunder fanatic, and love a great steak, a great cup of coffee, and great techie things.