Market trends, demographic analysis, economic indicators, and research methods for real estate markets.
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Foundation terms you need to know first (51 terms)
A retail center is a commercial property designed for various retail businesses, ranging from small strip malls to large shopping centers, providing goods and services to consumers.
Price Per Square Foot (PPSF) is a real estate metric calculated by dividing a property's total price by its finished square footage, used to compare property values on a standardized basis.
An industrial warehouse is a large commercial building used for storing, manufacturing, or distributing goods and materials, serving as a critical link in the supply chain for various industries.
Market value in real estate is the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale, with the buyer and seller acting prudently, knowledgeably, and typically uninfluenced by undue stimulus.
Walk Score is a numerical rating from 0 to 100 that measures the walkability of any address, indicating how easy it is to live car-free based on proximity to amenities.
Complex strategies and professional concepts (27 terms)
A market phenomenon where a declining real estate market appears to reverse and begin an upward trend, only to quickly resume its downward trajectory, trapping investors who bought into the false recovery. It often leads to significant losses for those who misinterpret the temporary rebound as a true market bottom.
The Case-Shiller Home Price Index is a leading measure of U.S. residential real estate values, tracking changes in home prices across 20 major metropolitan areas and nationally using a repeat-sales methodology.
Real estate financial modeling is the process of creating a quantitative representation of a real estate investment or development project to forecast its financial performance, assess risk, and support strategic decision-making.
Demand elasticity measures the responsiveness of the quantity demanded of a good or service to a change in its price or other influencing factors, crucial for real estate market analysis and investment strategy.
A value trap in real estate refers to an investment property that appears to be undervalued or a bargain but possesses underlying fundamental issues that will lead to further price depreciation or underperformance.
Market research in real estate is the systematic process of gathering, analyzing, and interpreting data about a specific market to make informed investment decisions, identify opportunities, and mitigate risks.
Market risk refers to the possibility of losses in real estate investments due to factors affecting the overall market, rather than specific property issues. These broad economic forces can impact property values, rental income, and investor returns.
Market sustainability in real estate refers to the long-term viability and stability of a market, indicating its capacity to maintain growth, attract investment, and support property values over extended periods without significant volatility or collapse.
Market timing in real estate involves attempting to predict future market movements to buy or sell assets at optimal points, aiming to maximize returns by capitalizing on cyclical trends and economic indicators.
A market trend is the general direction in which a market or asset price is moving over a period, indicating whether prices are generally increasing, decreasing, or staying stable.
Market value in real estate is the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale, with the buyer and seller acting prudently, knowledgeably, and typically uninfluenced by undue stimulus.
Market volatility refers to the rapid and unpredictable changes in real estate prices, interest rates, and investor sentiment, often influenced by economic factors.
The Median Dot represents the midpoint of individual Federal Open Market Committee (FOMC) members' projections for the future path of the federal funds rate, offering a consensus view on monetary policy.
The median home price is the middle value of all homes sold in a specific area during a given period, with half of sales occurring above and half below this price. It provides a reliable indicator of typical home values and market health for real estate investors.
Monetary policy refers to actions taken by a central bank, like the Federal Reserve, to manage the money supply and credit conditions, influencing interest rates, inflation, and ultimately, the real estate market.
Months of Supply (MOS) is a key real estate metric that indicates how long it would take for all current homes on the market to sell, given the current sales pace, assuming no new homes are added. It's a crucial indicator of market balance.
The mortgage rate lock-in effect occurs when homeowners with low-interest rate mortgages are reluctant to sell their properties or refinance, due to significantly higher prevailing interest rates for new loans.
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