The real estate market encompasses the sale, purchase, and lease of properties designed for residential and commercial use. This is one of the largest investment sectors in any economy and can profoundly affect the national economy. Many factors influence real estate trends, including economic conditions, interest rates, demographic trends, and government policies. Real estate market cycles also impact industry dynamics, with expansion and plateau phases generating growth in demand and property values, while contraction phases often lead to slow or even declining demand (PwC, 2020). Technological advancements and innovations are further reshaping the real estate industry and creating new opportunities for real estate buyers and sellers.
A strong local economy with high employment levels and low unemployment can increase the purchasing power of potential homebuyers, as well as their ability to pay for housing. In turn, this can drive up real estate prices and construction activity. However, when the economy falters or experiences a downturn, people are more likely to hold onto their homes and avoid major purchases.
Another key indicator of real estate market trends is the percentage of homes that sell for above their listing price. A rise in this figure indicates strong buyer demand and competitive market conditions, while a decline suggests that supply is greater than demand.