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.
Overvaluation in real estate occurs when a property's market price significantly exceeds its intrinsic value, often driven by speculative market sentiment or temporary supply-demand imbalances.
An overvalued market occurs when real estate prices significantly exceed their fundamental economic value, often driven by speculative demand, low interest rates, or irrational exuberance.
Panic selling occurs when investors rapidly sell off assets, often at a loss, due to fear, negative news, or market uncertainty, leading to sharp price declines and exacerbating market downturns.
The Peak Phase is the highest point in a real estate market cycle, characterized by maximum property values, strong demand, and robust economic activity, just before a market downturn or correction.
Population growth is the increase in the number of people in a specific area, a key indicator for real estate demand, property values, and rental income potential.
The Post-Foreclosure Stage is the period after a property has been legally repossessed by a lender and becomes a Real Estate Owned (REO) asset, often presenting investment opportunities for buyers.
Predictive analytics in real estate utilizes historical data, statistical models, and machine learning to forecast future market trends, property values, and investment outcomes, enabling proactive decision-making for investors.
Price discovery is the dynamic process by which the market determines the fair value of a real estate asset through the interaction of buyers, sellers, and available information.
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.
The Price-to-Rent Ratio compares median home prices to median annual rents in a specific market, indicating whether it's more financially advantageous to buy or rent, and signaling potential market overvaluation or undervaluation.
A pricing strategy in real estate is a systematic approach used by investors and sellers to determine the optimal listing price for a property, balancing market conditions, property characteristics, and investment goals to maximize returns or achieve a quick sale.
A pro forma financial statement is a projected financial report for a real estate investment, forecasting future income, expenses, and cash flow based on a set of assumptions. It is a critical tool for evaluating investment viability, securing financing, and strategic planning.
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