Supply & Demand
This chart reflects the nature of supply and demand for the criteria chosen. It provides valuable insight into current market conditions because imbalances in supply and demand will have a significant impact on pricing. When Supply is greater than Demand, prices are often pushed downward. When Demand approaches Supply, prices are maintained or can be moved higher.
Trends in Supply and Demand can help Real Estate Professionals to forecast future changes to prices. For example, a rising supply coupled with falling demand leads to an over supplied market that usually generates downward pressure on prices. In real estate this is called a "Buyer's Market" and the trend lines will tend to diverge. A Falling supply, coupled with high demand, tends to move prices upward. This is called a "Seller's Market" and the trend lines will be seen converging. The hallmark of a balanced market is when supply & demand are in a state of equilibrium. Under these conditions the trend lines will be running in parallel.