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.
An economic forecast is a projection of future economic conditions, including key indicators like interest rates, inflation, and GDP, which real estate investors use to anticipate market trends and inform strategic decisions.
Key data points that reveal insights into the current and future health of an economy, used by real estate investors to forecast market trends, assess risk, and inform investment decisions.
Economic indicators are statistical data points that provide insights into the overall health and direction of the economy, influencing real estate market trends, property values, and investment decisions.
Economic obsolescence refers to a loss in property value due to external factors unrelated to the property itself, such as changes in market conditions, economic downturns, or shifts in local demographics. It is typically considered incurable by the property owner.
Economic resilience refers to the capacity of an economy, region, or market to anticipate, withstand, and recover from economic shocks, maintaining stability and growth despite adverse events.
Emerging markets in real estate refer to regions or countries undergoing rapid economic growth and industrialization, offering high potential returns but also increased risks for investors.
An endogenous variable is a factor whose value is determined within the model or system being analyzed, influenced by other variables and relationships within that system, making it crucial for dynamic real estate investment analysis.
Entitlements in real estate refer to the legal rights and approvals granted by governmental authorities for a property to be developed or used for a specific purpose, often involving zoning changes, permits, and environmental clearances.
An Environmental Impact Study (EIS) is a detailed public document mandated by environmental laws (e.g., NEPA, CEQA) that rigorously assesses the potential significant environmental effects of a proposed major project, identifies alternatives, and proposes mitigation measures to inform decision-makers and the public.
Existing homes are properties that have been previously owned and occupied, distinguishing them from newly constructed properties. They represent the vast majority of real estate transactions and offer unique investment opportunities.
An exogenous variable is a factor originating outside a real estate investment model or system that significantly influences its outcomes but is not explained or determined by the model itself. These external forces are critical for advanced risk assessment and strategic planning.
The Expansion Phase is a period within the real estate market cycle marked by sustained economic growth, increasing demand, rising property values, and robust construction activity.
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