An explanation of the correlation between the movements along the supply and demand model and the recent steep rise in housing market prices please? My brain refuses to grasp the concept.
In: Economics
Manufacturing companies shut down or significantly lost production due to maintaining safe working environments.
Offices and office buildings directed resources to allow more personnel to work from home to maintain proper social distancing and keeping productivity up. And also cut employees down to cut costs
People living in crowded apartments in cities no longer have a need to pay outrageous prices to maintain close proximity to their place of work
This allowed a large amount of people in cities and even smaller towns to move into places further spread out in a very short amount of time the demand for homes increased, both previously built homes and new construction demands.
The need for new construction of homes increased demand for building supplies, but reserves ran out quickly because manufacturing businesses are not operating at full capacity.
This creates a bigger demand for building materials and houses so naturally the more desperate or more wealthy pay more for the materials and now these manufacturers are playing catch up. Yet the demand is still high.
As you can see it created a ripple effect.
Keep in mind these are not the sole events that took place. There are so many more factors at work to cause housing market demands to rise. And building material shortages but these are factors
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