Cost of houses and law of demand?

Question

house prices are rising and yet sales are also increasing.does this contradict the law of demand?

Answer 1

This does not violate the law of supply and demand in that because of all the sales there becomes a smaller supply and a larger demand driving up the price of homes. However, Today it is the opposite sales are down and prices are down in most areas of the country.

Answer 2

yes it does... the definition of law of demand is that as prices go up sales and demand go down, and vice versa

Answer 3

Interesting question. I see no violation of the law of demand but it does signal a relatively inelastic demand curve at the moment in the housing industry. Especially in Australia.

Answer 4

It still follows the rules as there is a shortage of houses on the market - this means that supply is less than demand and this is pushing prices up.  This is how prices can be increasing and demand is increasing as well.