Buildings can only be built in the long run. The amount of land does not change, but land can be changed from one purpose to another. However, buildings take time and therefore are not changeable in the short run.
Why is supply of real estate space inelastic in the short run? How do housing, office and warehousing compare in terms of speed of reaction to demand (elasticity
The amount of land does not change, but land can be changed from one purpose to another. However, buildings take time and therefore are not changeable in the short run.It takes a while to build new buildings and existing buildings are very costly to tear down and convert to something else.
Building new
structures require a lot of planning and foresight. In the absence of these two
qualities, the real estate space becomes inelastic in the short run. Housing,
office and warehousing structures all suffer because of poor infrastructural
planning. It is therefore important to align with reputed real estate companies
like Unique Properties that build structures in a systematic manner and stops
the market from becoming inelastic.
