What does demand refer to in real estate?

Demand in real estate specifically refers to the need for housing in a specific area, which encompasses not only the number of people looking for properties but also their willingness and ability to purchase or rent those properties at prevailing market prices. This understanding of demand is crucial because it drives market activity; when there is a strong demand for housing, prices typically rise, and when demand decreases, prices may stabilize or fall.

Factors contributing to demand can include population growth, employment rates, and economic conditions in a specific location. In contrast, other options focus on different elements of the real estate market. The total number of buyers in a market and the number of sellers relate more to market supply and balance rather than how much demand exists. The amount of property available, while relevant, reflects supply rather than demand, and thus does not capture the essence of what demand signifies in real estate contexts.