What heavily influences the market value of real estate?

Market value is primarily influenced by the interplay of supply and demand within the real estate market. When demand for properties in a certain area exceeds the available supply, prices tend to rise. Conversely, if there is an oversupply of properties and not enough buyers, prices generally fall. This dynamic reflects basic economic principles and is a crucial component of real estate valuation.

While other factors do contribute to market value, supply and demand is the overarching principle that governs price fluctuations. For example, the location of the property certainly affects demand—some areas are more desirable due to schools, amenities, or job opportunities. However, without the corresponding balance of supply, the impact of location on market value cannot be fully realized. Similarly, type of construction and length of time on the market play roles in determining value, but they would ultimately be assessed in relation to the prevailing supply and demand situation in the market at any given time. Thus, understanding the dynamics of supply and demand is essential for accurately determining real estate market values.