The law of equilibrium applies to the housing market as well. If the subject property is located in an area where most properties are owned by investors, most likely the value of the home will not increase significantly compared to an area where the properties are mainly owner occupied. When an investor sells his property most likely they are not going to purchase a property in the same area. This causes more properties to be on the market on that specific area.

Knowing your housing market and what type of market conditions exist when you are looking to buy a home can save you thousands of dollars by not over bidding on a home. Some Realtor's may not be willing to tell you that you are over-bidding because the more the home sells for the more commission they will make. If you are in an area where there are a lot of homes for sale and it is a buyer's market you can usually buy a home for a considerable price under market value, especially if you are patient and have the ability to wait until you find the right home for the right price. However, if you are in a seller's market where homes are in high demand and you have more buyer's than sellers and if you are too patient and do not bid high enough you may lose the house of your dreams and lose out on a home that has the ability to appreciate very quickly. Therefore, it is important to know what kind of housing market and what kind of market conditions exist in the area you are looking to purchase a home in before buying a home. Working with a great Realtor and a great Mortgage Broker can help you with your home purchase and help educate you on the housing market in your area.