Which principle describes the relationship between the supply of and demand for real estate?

The principle that describes the relationship between the supply of and demand for real estate is Supply and Demand. This fundamental economic principle illustrates how the quantity of property available (supply) and the desire or need for property (demand) interact to determine the prices and availability of real estate in the market.

When demand for real estate rises, prices generally increase if the supply remains constant or does not keep pace. Conversely, if there is an oversupply of real estate and demand decreases, prices typically fall. This dynamic interplay is crucial for understanding market trends, setting pricing strategies, and making investment decisions in real estate. The concept highlights the importance of both elements in influencing market behavior, which is essential knowledge for anyone involved in real estate.