The Role of Supply and Demand in Real Estate Pricing

The housing market is influenced by supply and demand, where high demand and low supply drive prices up, often causing bidding wars. Low interest rates increase demand by making mortgages more affordable, while supply fluctuates due to factors like new construction, population changes, and disasters. The 2000s housing crash resulted from high demand fueled by low rates and relaxed lending, followed by oversupply and falling prices. Understanding these dynamics helps predict market trends.