According to the Principle of Supply and Demand, what is the relationship between property price and demand?

The correct relationship according to the Principle of Supply and Demand is that price varies directly with demand. This principle indicates that as demand for a property increases, the price tends to rise. Conversely, if demand decreases, the price tends to fall. This direct relationship means that more people wanting to buy a property or more interest in a particular location can drive up the price, while a decline in demand can lead to lower prices due to less competition among buyers.

Understanding this principle is crucial for a tax assessor as it impacts property valuations. When demand is high, properties may be valued higher due to increased buyer interest, which can affect assessed values for taxation purposes. Additionally, knowledge of this relationship helps assessors and stakeholders make informed decisions in real estate markets.