Module 10 Influences on Real Estate Flashcards
Identify 4 agents of production
land, labor, capital and Entrepreneurial Coordination
Identify the four broad forces that influence value
Government and Legal - involves controls and regulations
Economic - focuses on the changes in demographics, social trends, and attitudes
Environmental and geographic - involves the environmental surroundings both natural and man-made
linkages
When people buy real estate, one of their critical considerations is how long it takes to travel (and the costs associated with that travel) to employment centers, recreational facilities, shopping, and other forms of commerce. This whole time distance relationship is referred to as linkage.
Superfund law
refers to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Particularly important for commercial investors because the landowner of record might be held liable when a release of hazardous materials has occurred on the property even if the owner was not responsible for the original contamination
Brownfields Revitalization and Environmental Restoration Act
ammended CERCLA and lessened many of the liability issues for property owner in 2001
. The four agents of production are
A) Land, labor, capital, and entrepreneurship
B) Land, improvements, labor, and materials
C) Land, labor, capital, and money
D) Land, labor, capital, and improvements
A) Land, labor, capital, and entrepreneurship
Feedback: Correct
Stock market averages drop 50% of their value in a 6-month period: A) Governmental and legal B) Environmental and geographic C) Social D) Economic
D) Economic
Feedback: Correct. A drop in financial investments would be at the national level and come under economic forces.
A sunbelt city has a growing population of senior citizens. A) Social B) Governmental and legal C) Environmental and geographic D) Economic
A) Social
Feedback: Correct. Population issues would be a social force.
Four forces impact value. Employment levels, wage rates, and interest rates are examples of which force? A) Environmental and geographic B) Governmental and legal C) Economic D) Social
C) Economic
Feedback: Correct. These economic forces are examples often observed at the state and local level.
The lack of snow in the last five years hurts several industries in the upper Midwest such as makers of snowmobiles, snow blowers, etc. A) Environmental and geographic B) Economic C) Social D) Governmental and legal
A) Environmental and geographic
Feedback: Correct. Climate is related to the geographic area and therefore would come under environmental and geographic forces.
A state legislative body passes a tax increase on corporations, and several large business enterprises move their operations out of the state. What is the most likely underlying force on value in this scenario? A) Social B) Economic C) Environmental and geographic D) Governmental and legal
D) Governmental and legal
Feedback: Correct. This force involves controls and regulations
A city on the gulf coast has been struck by a series of hurricanes in the last five years. The population in the city has been decreasing as discouraged property owners give up and move to locations further inland from the coast. What is the most likley underlying force on value in this scenario? A) Economic B) Environmental and geographic C) Governmental and legal D) Social
B) Environmental and geographic
Feedback: Correct. Although other forces of value may play a role in this scenario, the environmental/geographic influence is the significant force.
When an appraiser is analyzing the economic ingredients that are interconnected in a real estate project, which ingredient, known as an agent of production, identifies the cost of facilitating all the other agents so that wealth is created in the market endeavor? A) Entrepreneurial coordination B) Labor C) Capital D) Land
A) Entrepreneurial coordination
Feedback: Correct. This is the investment of time, expertise, and equity by the developer in the project.
