Economic and physical characteristics of real property

Question 1

What are the 4 economic characteristics that impact land value?

Answer 1

Scarcity
Situs of area preference
Permanence of Investments
Improvements /Modification

Question 2

Scarcity

Answer 2

limited availability of properties in a desired location type or price point

“When properties are scarce but demand is high, the prices typically rise”

Question 3

Situs of Area Preference

Answer 3

preference of a specific area

“Area preference is based on several factors such as convenience, reputation, and history”

Question 4

Permanence of investments

Answer 4

The long-term state of real estate investments

“Cost in nature of infrastructure improvements (roads, electric installation, waste water, natural gas, etc) can’t easily be reversed

Question 5

Improvement / Modifications

Answer 5

permanent change to a property that increases its values

” Improving things like sheds, barns, garages, fences etc…. Which can positively or negatively impact the value.”

Question 6

What are the 3 physical characteristics that impact land value?

Answer 6

Immobility, Indestructibility, Uniqueness

Question 7

Immobility

Answer 7

The Lands Geographical location is fixed; It can never be changed

Question 8

Indestructibility

Answer 8

land itself cannot be destroyed; However improvement to my deteriorate over time

Question 9

Uniqueness

Answer 9

parcel (piece of land) will not be exactly like another This is the concept of non-homageneity (lack of uniformity between pieces of land)