True or False: If new supply exceeds new demand, vacancy rates should decrease.

The statement "If new supply exceeds new demand, vacancy rates should decrease" is indeed false. When new supply exceeds new demand, it indicates that there are more properties available than there are tenants or buyers looking to occupy them. This imbalance often leads to an increase in vacancy rates, as the excess supply of properties results in more spaces remaining unoccupied.

In a real estate market, the relationship between supply and demand is critical. When supply outpaces demand, landlords may have to lower rents or offer incentives to attract tenants, which reflects a struggling market. This situation is not conducive to a decrease in vacancy rates; rather, it generally results in an increase in vacancies as properties become harder to lease.

Understanding market dynamics is essential in assessing the health of a real estate market. Thus, when analyzing supply and demand, the general rule is that exceeded supply can lead to higher vacancy rates, making the original statement false.