Supply and Demand

Appraisal research often reveals important facts about differences in a market areas.  Some towns, especially those with restrictive zoning codes or maximum building quota's, can have dramatically different supply and demand characteristics from other towns / areas / jurisdictions with aggressive growth plans and a large number of properties available for sale and development.  Thus, real estate markets are not uniform with regard to supply and demand.  Making "apples" to "apples" comparisons thus require appraisers to select comparable properties from the same market area / sub-market area as their subject property.

An example of the supply and demand differences that can exist is best displayed in the Las Vegas market area by comparing Boulder City to Las Vegas market metro market.  Boulder City, while located only a few miles to the southeast of the Las Vegas metro area has a much different real property market.  Boulder City has development restrictions / building quotas, it has significantly fewer undeveloped land parcels available for development and thus supply is severely limited.  

Since the average / median home price is higher in Boulder City than it is in metropolitan Las Vegas, it appears that demand is greater, however in point of fact it may be true that the restricted / limited supply of homes and land in Boulder City is the sole reason for the disparity.

In summary, the supply and the demand for homes or other real property often differs from one area to another, even within metropolitan areas like Las Vegas.  It is important for appraisers to understand the differences in location and make comparisons that consider supply and demand differences. 

Contact us with your questions or concerns regarding supply and demand or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be e-mailed at grigdon@cox.net.  

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.