A construction boom in a market is an indication that prices

A construction boom in a market is an indication that prices

• A. Have been increasing
• B. Have been decreasing
• C. Will become stagnant
• D. Are unpredictable

Answer: (A)

A construction boom happens when demand for housing and commercial space is strong and buyers are willing to pay higher prices. Developers rush to start new projects because they expect to sell or lease at higher rates, which tends to push prices upward as the new supply enters the market. So a boom in construction is a sign that prices have been increasing (or at least are expected to increase) due to that strong demand and favorable market conditions. If prices were falling or flat, builders would be more hesitant to begin large new projects, and a construction boom wouldn’t occur.

A construction boom happens when demand for housing and commercial space is strong and buyers are willing to pay higher prices. Developers rush to start new projects because they expect to sell or lease at higher rates, which tends to push prices upward as the new supply enters the market. So a boom in construction is a sign that prices have been increasing (or at least are expected to increase) due to that strong demand and favorable market conditions. If prices were falling or flat, builders would be more hesitant to begin large new projects, and a construction boom wouldn’t occur.