spring 2013 session 1: wednesday, january 14, 2013 real estate economics
TRANSCRIPT
Spring 2013
Session 1:
Wednesday, January 14, 2013
REAL ESTATE ECONOMICS
Real Estate EconomicsDefinition of EconomicsDefinition of Real EstateCourse DefinitionMotivation
Why study economics?Why develop economic models for real
estate?
What is economics?The study of human interactionThe study of scarcityThe study of resource allocationThe study of production and consumption
Real estateProperty, land or fixtures whose nature is
definable and whose ownership rights are specifiable through law.
Real estate economicsUnderstand value and return of residential
and commercial real estate.Develop theories and models that help us
think through the complicated dynamics of property, value and exchange.
Why?Personal reasons
To best understand owning v. renting, buying v. investing, when to buy, what to buy, how to buy, where to buy.
Professional reasonsTo best serve customers in their real estate
transactions—property or financing or investment advise.
EconomicsOpportunity cost and marginalityProduct/GoodConsumers and producersDemand and supplyEquilibrium and elasticityChanges in market conditions
Real EstateDepartures from simple market analysis
Product heterogeneityMarket levels/segmentsBuyers and sellersBuilders and developersPayment over long time periods
Credit issuesReinsurance issues
GovernmentFederal
RegulationsLaws
StateRegulationsLaws
County and City/townRegulationsLaws
GlobalizationThe Global Financial System: work in
progressMoneyBankingMonetary FlowsMonetary PolicyGlobal CoordinationReal Economic EffectsInvestor Behavior