Supply and Demand

Its the oldest economic theory on the books. If people want something bad enough the price goes up and if no one wants it then it makes no difference how cheap it is.

The Real Estate Market adheres to this economic theory about as well as any industry. Just take a look at the rental market here in the city. Over the winter, prices were down 20% off the high, landlords were offering all sorts of incentives....a free months rent, no brokerage fees, free membership to the building gym, no security deposit and so on and yet....landlords reported vacancy rates of over 5% (a huge number here in the city).

Ok, fast forward six months and you get a completely different picture. The incentives are gone, the prices are up, vacancy rates are around 1% and the landords? They are smiling again.

Why the huge difference? Well, for one thing the summer months are always the busiest time of the year for rentals. But, add to the equation that the job market is growing again and with every new job created a need for an apartment comes along with it.

Supply and Demand....I wonder if any of the economists of long ago were looking for an apartment when they developed their theory