What Influences Market Trends?

Net population growth creates demand for housing. When an increase in demand occurs without a matching amount of new supply, real estate owners enjoy rising rental rates and higher occupancy. If population growth is particularly strong and supply remains constrained, a local real estate market can become “a landlord’s market,” in which tenants lose negotiating power.

Conversely, population declines can cause a real estate market trend in which “a buyer’s market” forms, within which the supply of existing housing units outstrips demand. Sometimes, an oversupply of housing can lead to a soft market in spite of a growing population. In these cases, supply and demand can return to an equilibrium if population growth persists and new supply tapers off.