Question

At least 300 words:

Now that you have a better idea about how markets work, you can do a little mental forecasting. You can ask yourself “how do I expect prices to change in this situation?”   Take the market for housing and the current situation we are in with the pandemic.   What do you expect to happen to home prices over the upcoming months: rise, fall, not change? In real estate lingo do you think this will be a buyer’s market or a seller’s market? Explain your answer.

Answer 1

Given the current pandemic situation, as there is too much loss of consumer confidence in the economy as well as people are struggling with their incomes, there will be a drastic fall in the demand for housing, as people would not wish to invest in such an unstable market at such time, which involves a huge investment.

As a result of this, demand curve for housing will shift to the left, leading to a fall in the prices as well as quantity sold of houses.

Thus, prices are expected to fall in the coming months.

In real estate lingo, this is a buyer's market as the buyer can now buy the same product at sufficiently lower prices, thereby increasing his surplus.