1. Spring 2013 Session 1: Wednesday, January 14, 2013 REAL ESTATE ECONOMICS

2. Real Estate Economics Definition of Economics Definition of Real Estate Course Definition Motivation Why study economics? Why develop economic models for real estate?

3. What is economics? The study of human interaction The study of scarcity The study of resource allocation The study of production and consumption

4. Real estate Property, land or fixtures whose nature is definable and whose ownership rights are specifiable through law.

5. Real estate economics Understand 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.

6. 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 reasons To best serve customers in their real estate transactions—property or financing or investment advise.

7. Economics Opportunity cost and marginality Product/Good Consumers and producers Demand and supply Equilibrium and elasticity Changes in market conditions

8. Real Estate Departures from simple market analysis Product heterogeneity Market levels/segments Buyers and sellers Builders and developers Payment over long time periods  Credit issues  Reinsurance issues

9. Government Federal Regulations Laws State Regulations Laws County and City/town Regulations Laws

10. Globalization The Global Financial System: work in progress Money Banking Monetary Flows Monetary Policy Global Coordination Real Economic Effects Investor Behavior