What does a situation with more available units than tenants indicate?

A situation with more available units than tenants indicates a technical oversupply in the market. When there is an oversupply, it means that the supply of rental units exceeds the demand, leading to vacancies. This situation can create downward pressure on rental prices, as landlords may need to lower rents or offer incentives to attract tenants. It can also signify a potential imbalance in the market, where new constructions weren't aligned with demand or economic conditions affecting tenant decisions.

In contrast to this, a market growth scenario would be characterized by increasing rental demand, where more tenants are competing for available units. High demand typically results in less availability and upward pressure on rents, while rental stability would indicate a balanced environment where supply and demand are relatively equal. Understanding the implications of oversupply helps property managers and investors make informed decisions about pricing, marketing, and long-term strategy in real estate.