Why is the real estate market slow to respond to national changes?

The real estate market is slow to respond to national changes primarily because transactions take time. The process of buying and selling real estate involves multiple stages, including listing a property, marketing it, negotiating offers, securing financing, completing inspections, and finally closing the deal. Each of these steps can span weeks or even months, causing a delay in the market's ability to react swiftly to national economic shifts or trends.

Furthermore, real estate transactions are often influenced by local market conditions and buyer behavior, which can fluctuate independently from national trends. The inherent complexity and time-consuming nature of transactions mean that even when national circumstances change—such as shifts in interest rates or economic indicators—the real estate market does not immediately reflect these changes, leading to a slower overall adjustment.

In contrast, centralization of the market, frequent changes in government policies, and the notion that property values are not location-dependent do not capture the essence of the transaction process and its impact on the market's responsiveness.