Humber/Ontario Real Estate Course 1 Exam Practice

Which of the following statements correctly describes a seller's, buyer's, or balanced market?

1. A seller's market exists when the supply of homes is plentiful, but buyer demand is low

2. A buyer's market typically features increasing sale prices

3. A balanced market is less stressful due to reasonable supply meeting buyer demand

4. A seller's market involves buyers including more conditions and viewing several properties before purchasing

5. A balanced market results from a significant imbalance between supply and demand

6. A buyer's market is intense due to fierce competition among buyers

The correct answer is: A balanced market is less stressful due to reasonable supply meeting buyer demand

The statement that correctly describes a balanced market is that it is less stressful due to reasonable supply meeting buyer demand. In a balanced market, the number of homes available for sale aligns closely with the number of buyers in the market, creating conditions that are favorable for both sellers and buyers. This equilibrium helps to stabilize prices and reduces the anxiety that often accompanies more competitive markets. In contrast, a seller's market is characterized by a shortage of available homes relative to buyer demand, often leading to bidding wars and higher prices. Similarly, a buyer's market occurs when there is an excess of homes available, allowing buyers to negotiate better deals but potentially leading to lower sale prices. Therefore, the essence of a balanced market is the harmony between supply and demand, establishing a more relaxed environment for both parties involved in real estate transactions.