Real estate market encompasses all real property available for sale in a particular area. This includes commercial, residential, and land properties such as houses, apartments, and farmland. Real estate agents help clients buy or sell these types of properties and understand the market trends that influence them. They also stay informed on local laws and regulations governing real estate.
The real estate market is distinct from other markets in several ways, including its durability and the fact that it operates as a stock/flow market. This means that the vast majority of the real estate supply is made up of existing buildings and the remaining portion is new construction. This contrasts with other markets, which operate as a flow market and are primarily comprised of the flow of goods that enter the marketplace.
Because of this difference, real estate market dynamics are different from other markets. Specifically, the immobility of the properties (except for mobile homes) and the inability to move goods from one location to another mean that changes to the real estate market must occur in a manner that is different than other goods markets. This is because consumers must move to the good rather than the goods moving to the consumer.
Real estate marketing is also distinguished by the high-value nature of the products and the significant financial and emotional investment required to purchase them. As a result, information is often hard to find and the entry and exit barriers are steep. As such, most people require the services of a real estate agent to operate within the industry.
