A real estate market is a group of people and businesses involved in the buying, selling or leasing of properties. These properties include land and any buildings on that land, such as homes, shopping centers, and office buildings. It also includes farmland and natural resources within property boundaries, such as minerals, water, and crops.
Like all markets, the real estate market is driven by supply and demand. When there are more available properties than buyers, prices fall. When demand is higher than supply, prices rise. It’s important to understand the trends in your local market so you can be an empowered homebuyer or seller. This involves staying up to date on the latest economic news, monitoring interest rates and taxes, and keeping track of job growth and other industry trends.
Unlike most goods, real estate is durable and usually increases in value over time. This gives it unique characteristics that set it apart from other markets, such as being illiquid and slow to change hands.
The real estate market is made up of three primary segments: residential, commercial and industrial. Residential real estate comprises structures designed for individual or family living, including single-family homes, condominiums, and townhouses. Commercial real estate consists of retail, office, and hotel spaces, while industrial real estate is used for manufacturing, storage, and distribution of goods and services.
People who participate in the real estate market include owners, developers, and renovators. Owners purchase properties to live in or rent out. Investors buy and sell properties to earn a profit. Real estate wholesalers find and contract homes to sell to other investors or homeowners without renovating them. Finally, government agencies provide essential infrastructure and regulations that foster growth and stability in the real estate market.