Which factor typically influences market demand in real estate?

Economic conditions and interest rates play a crucial role in influencing market demand in real estate for several reasons. When the economy is strong, consumers tend to have more disposable income, which often leads to increased buying power and a greater willingness to invest in real estate. Conversely, during economic downturns, consumer confidence may decline, leading to reduced demand for properties.

Interest rates, in particular, significantly affect the affordability of mortgages. Lower interest rates generally make borrowing more affordable, encouraging more buyers to enter the market and stimulating demand for homes. Conversely, higher interest rates can lead to decreased purchasing power, as monthly mortgage payments become more expensive, consequently reducing demand.

The other factors listed, such as the number of available agents, the location of the agent's office, and the duration of agreements, do not share the same level of direct influence on overall market demand. While they may affect individual transactions or agent performance, they do not fundamentally impact the collective demand for real estate in the broader marketplace as economic conditions and interest rates do.