In property valuation, what does demand usually indicate?

Demand in property valuation is a critical concept that reflects the relationship between the number of buyers interested in purchasing properties and the availability of those properties on the market. When we talk about demand, we are primarily focused on how many buyers are actively looking to purchase properties compared to how many are available for sale. This balance is essential for assessing market conditions; when demand outweighs supply, property values typically rise due to increased competition among buyers. Conversely, when supply exceeds demand, property values may decrease as sellers may need to lower prices to attract buyers.

While consumer confidence in the market is indeed influential, it does not directly equate to the measure of demand itself; rather, it's a broader indicator of market sentiment. Similarly, the distinction between residential and commercial properties can provide useful insights for specific investment strategies but does not directly represent demand across the property market as a whole. Finally, the number of properties available for sale is more a function of supply rather than a direct indicator of demand, even though it's interrelated. Thus, the correct option underscores the crucial dynamics between buyers and sellers that define demand in real estate valuation.