Chapter 19 - The Real Estate Market Flashcards
What are the three basic questions that every economy in every land in the world has to deal with?
What will be produced?
Who will do the producing?
Who will get what is produced?
The ___________ actually decides what will be produced.
Consumer
The _______________ of a comparable-quality product will go on doing the producing.
Most efficient producer
Those people who ______________________ will get what is produced.
Have money and are willing to spend it in the marketplace
What are the five characteristics of the real estate marketplace?
- Immobility of real estate
- The market is slow to respond to change in supply and demand
- Land is indestructible
- Real estate is unique
- Government controls influence the market through zoning, building codes, taxes, and so forth
What is supply?
The amount and type of real estate available for sale or rent at differing price levels in a given real estate market
What are the variables that influence supply?
Availability of skilled labor
Availability of construction loans and financing
Availability of land
Availability of materials
What is demand?
The desire and ability to purchase or rent goods and services
What are the variables that influence demand?
Price of real estate Population numbers and household composition Income of consumers Availability of mortgage credit Consumer taste or preferences
What is a household?
As defined by the Bureau of the Census, US Department of Commerce, is any person or group of persons occupying a separate housing space
What is a buyer’s market?
An excess of supply
What is a seller’s market?
An excess of demand
What are the market indicators?
Price levels
Vacancy rates
Sales volume
What are vacancy rates?
The percentage of rental units that are not occupied
Any economy in any nation must find answers for three questions: what will be produced, who will do the producing, and:
Who will get what is produced
The company who will do the producing is the:
Most efficient producer of a comparable-quality product
The ultimate decision makers in the marketplace are:
Consumers
What characteristic does not define the real estate market?
The market is quick to respond to changes in supply and demand
There is an ___________ relationship between price and demand.
Inverse
Government controls influence the real estate market both directly and indirectly. An example of an indirect control is:
Monetary policy
What statements are associated with the economic concept of demand?
Demand is the desire and ability to purchase or lease goods and services
Changes in price cause an inverse change in demand
Consumer preferences influence demand
Variables that influence demand include:
Consumer tastes and preferences
Population size and household composition
Consumer income
When the equilibrium of the real estate market is upset by an excess supply:
A buyer’s market exists
One person or a group of persons occupying a separate housing space is technically defined as:
A household
