In real estate, how is supply typically defined?

Supply in real estate is typically defined as the amount of properties available for sale or rent. This definition is crucial because it relates directly to the market dynamics of real estate. When evaluating supply, real estate professionals look at all types of properties that are currently on the market, including residential, commercial, and rental properties. This information is essential for understanding market conditions, pricing trends, and buyer demand.

For example, a surge in supply may indicate that many property owners are listing their homes or that new developments are completing, which can lead to a decrease in property prices if demand does not keep pace. Conversely, a limited supply can create upward pressure on prices due to competition among buyers for the few available properties.

Other options do not accurately capture what supply in the real estate context refers to. The number of properties sold in a given period indicates market activity but does not reflect available inventory. The price range of properties pertains more to market valuation rather than the quantity available. The total number of vacant lots in a city may provide insight into potential future supply but does not represent the current, active supply relevant for buyers and renters today.