Demand refers to the quantity of goods or services that consumers are willing and able to purchase at a given price. It plays a crucial role in the real estate market as it influences prices and availability.
Evaluation in real estate involves a detailed study of the potential uses of a property, but it does not focus on determining the present value. It includes analyses such as market trends, feasibility studies, highest and best use assessments, and base land use.
Market analysis involves studying supply and demand conditions in a specific area for a specific type of property or service. It aids developers in deciding project types and securing financing for proposed developments.
A systematic analysis conducted to understand and evaluate the market conditions for a particular product, service, or strategic business decision, focusing primarily on supply and demand, competition, and economic indicators.
The Natural Vacancy Rate is the average vacancy rate for a rental property market that balances supply and demand, serving as a long-term benchmark to evaluate whether current vacancy rates are high or low.
Overbuilding occurs when there is more real estate construction in a specific area than the market can absorb within a reasonable amount of time. This imbalance between supply and demand often leads to vacant properties and lower rental rates.
Residual Demand refers to the amount of product (such as houses, office space, or building sites) that a specific provider can expect to sell in a particular market. This concept involves understanding the provider's expected market share within a competitive market, influenced by factors such as the attractiveness of the provider's product compared to the competition and how well the existing market is currently served.
The fundamental economic concept of Supply and Demand dictates that market prices are determined at an equilibrium point where the quantity supplied matches the quantity demanded. In real estate, this principle is complicated by the slow adjustment of supply due to lengthy planning and development periods.
