Which of the following factors would likely signal a downturn in the real estate market?

A downturn in the real estate market can be indicated by several key factors, each contributing to an overall negative outlook for property values and market activity.

Increasing inventory rates suggest that more homes are available for sale than there are buyers, which can lead to a decrease in home prices as sellers compete to attract buyers. When inventory levels rise, it often points to a slowdown in demand, indicating potential challenges in the market.

A rise in building permits typically indicates that developers are optimistic about market conditions and are planning new construction projects. However, when taken in context with other indicators, an increase in building permits during a slowing market can result in oversupply, ultimately contributing to a downturn. If developers are building more than what the market can absorb, it can worsen existing conditions.

High vacancy rates are another clear sign of a market in distress. When a significant number of properties are unoccupied, it demonstrates a lack of demand for housing. This oversupply can lead to declining rents and property values, severely impacting landlords and investors.

All of these factors together point to underlying weaknesses in the real estate market, suggesting a downturn is likely. When combined, each aspect reinforces the message that the market is experiencing challenges, making the option that includes all of these indicators the most comprehensive