^^^^help plz^^^^Explain how housing is allocated by supply and demand forces.Give examples!?

Answer 1

Most people when renting or buying a home spend 30%of their income up to a max of 50% on housing. They bid for availible housing in a community, and will occupy the amount of space they can "afford" In a neighborhood they find acceptable. If the cost of new construction plus land is less this price, new homes will be built and expand the supply until equilibrium is reached and new home price equals the market rate, which will depend on people's income as well as the housing supply. When land prices are high because of limited space to build, housing is very expensive, especially if many people also have high incomes, a for example New York or SF. In small towns and rural areas land is cheap so housing prices are near the price determined by construction costs. There are some places that are losing population so housing cost are below the price of new construction, so no new houses have been built in 50 years.

Answer 2

Do you know about supply and demand? If it is cheaper to buy a new home, rather than an existining, would we not say the demand for homes is greater than the supply? IF the demand for homes is less than the supply, like in Michigan or Florida currently, it would be more expensive to build a new home than to buy an existing, and prices would be continuously decreasing due to decrease in demand.

Answer 3

Is it? Supply and Demand are just names we use to explain often different groups of people, and how their desires and abilities interact.

Make something up! Imagine if you want to buy a house. What makes people buy houses? What influences their behavior? What are the alternatives to buying a house, what is happening to those things?

What makes a person want to sell their house?

What makes a construction company want to build a house, or number of houses, and what makes a person want to buy a bunch of new houses, have someone build them, and then sell them all?

Seem like you got to think about people's incomes, the changing structure of jobs, interest rates, financing issues, expectations of future prices, interest rates, population growth and so on and on.

What makes real estate interesting now is that Buble is on the verge of bursting, and you can about what a Bubble is, and if they really exist and are rational and so on.