Recent advancements in demand-side management, particularly in transactive energy trading systems (TETS), have yielded significant benefits for distribution systems. However, challenges such as market liquidity, individual market power, and net demand reduction persist in existing TETS frameworks. To address these issues, this research introduces an optimized TETS architecture. This framework integrates final demand response choices and a two-round peer-to-peer electricity trading mechanism, aiming to promote active participation and profitable power transactions among neighboring end-users. The key objective is to establish real-time market efficiency by determining market clearing prices based on supply-demand ratios. Case studies involving ten residential participants validate the effectiveness of the proposed architecture, showcasing its potential to transform local energy markets with improved dynamics for a more sustainable and economically beneficial energy ecosystem.