Physical and Economic Characteristics of Land Flashcards
What are the 3 physical characteristics of Land?
- Immobility;
- Indestructibility
- Unique (Non-Homogeneic)
Immobility
Land is physically immobile. It cannot be moved from one location to another.
Is the value of real estate effected by its surroundings?
Yes. For example, a very nice house will lose value if the neighborhood around it seriously declines.
Land has several distinguishing economic characteristics. They are (PASS):
- Permanency of Improvements
- Assemblage
- Situs
- Scarcity
Scarcity
The supply of land is fixed and can never be increased
SITUS
A Parcel’s LOCATION
What are the 2 primary factors of SITUS ?
- Certain locations are more preferable than others
2. A parcel of Real Estate is PERMANENT–it cannot be moved.
Can a difference in situs can cause two physically similar parcels of real estate to have very different economic values?
Yes. For example, undeveloped land located in a rural county will likely cost much less than in a populous area.
Should you consider TYPE of USE when considering SITU (Area Preference)?
Yes. For example, if you want to build a gas station - corner lots are more valuable than a lot in the middle of a block.
What is the most important economic characteristic of land?
SITUS (Location).
ASSEMBLAGE?
Combining two or more successive parcels of real estate into a single parcel under one ownership.
When is Assemblage usually done?
When combining the parcels into one parcel is more valuable than the total of the separate parcels.
An example of when ASSEMBLAGE takes place is when?
Large office buildings or condo developments often ASSEMBLE parcels before the project can proceed.
Plottage?
Any increase in property value resulting from ASSEMBLAGE.
PERMANENT IMPROVEMENTS
IMPROVEMENTS on parcels are usually PERMANENT. Combined with the fact that LAND CANNOT BE MOVED, and you have a market that is less flexible than other markets.
