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Related Flashcards
Related Topics
Cards In This Set
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Appreciation
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The increase in the market value of real estate.
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Inflation
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The increase of the general price level of goods and services, or a decrease in the purchasing power of the dollar.
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Cycles
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Are periodic, irregular up and down movements in economic activity that take place over a period of two to six years.
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The 4 real estate cycles:
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1. recovery 2. expansion 3. peak 4.contraction
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Market
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Trade in a specified commodity.
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Perfect Market
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An Economic model in which the products are homogenous, there is complete information, and no buyers or sellers may influence the market.
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Liquidity
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The degree to which an asset can be readily converted into cash without affecting the asset's price. ex. stock market
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Assumptions for a perfect market:
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Large # of byers and sellers , perfect and complete info, freedom to enter or exit the market, homogeneous product, or available subtitutes, portable and mobile, no buyer or seller big enough to influence the market, minor Gov role in pricing.
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Efficient Market
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One with a large number of buyers and sellers in which easily produced goods and services are readily tranferable, and market prices adjust rapidly to reflect new information.
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Organized Market
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One in which participants operate under recognized rules for the purpose of buying and selling a particular commodity. EX ebay, stock ex
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Imperfect Market
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Doesn't meet requirements for perfect market.
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Characteristics of a Real Estate Market. (Imperfect Market)
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Limited # of buyers/sellers, Info not readily avail, unique product(nonHomogeneous), supply of land is limited, suppliers can't build new quick, RE is immobile and not portable, RE is local and segmented, Gov influences financing and property use
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Illiquid
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An assest can't be easily converted into cash
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Federally related transaction
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Any real estate transaction involving federal insurance or assistance
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Capitalism
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An economic system in which most of the economy's resources are privately owned and managed.
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