1. Florida Real Estate Principles, Practices & Law 38th Edition
Linda L. Crawford
Copyright © 2015 Kaplan, Inc.
All rights reserved.

2. Chapter 19
The Real Estate Market

3. Three Key Questions What will be produced? Who will do the producing?
The consumer decides
Who will do the producing?
The most efficient producer of a comparable-quality product
Who will get what is produced?
Those persons who have dollars and are willing to spend them (buying power)
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4. Characteristics of the Real Estate Market
Immobility of real estate
Fixed location
Market is slow to respond to change in supply and demand
Land is indestructible
Structures have long life spans
Real estate is unique
Heterogeneity
Government controls influence the market through zoning, building codes, taxes
Both direct and indirect influences
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5. Variables that Influence Supply
Skilled labor
Construction loans and financing
Land
Scarcity of usable land
Laws regulating use
Materials
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6. Variables that Influence Demand
Price of real estate
Change in price results in an inverse change in demand
Population numbers and household composition
Household is any person or group of persons occupying separate housing space
Income of consumers
Availability of mortgage credit (barometer of the real estate market)
Small change in interest rates creates large change in monthly payment
Consumer tastes and preferences
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7. Market Conditions Buyer’s market Seller’s market Supply exceeds demand
Buyers get better prices and terms
Seller’s market
Demand exceeds supply
Sellers able to sell for higher prices
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8. Interpreting Market Conditions
Market indicators
Price levels of new home sales and number of building permits
Vacancy rates
Percentage of available rental units that are not occupied
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9. Vacancy and Occupancy Rates
A apartment building has 120 units of which 10 are unoccupied. What is the building’s vacancy rate?
10 ÷ 120 = .083 (8.3%) Vacancy Rate
Another apartment complex has 528 units of which 502 are rented. What is the occupancy rate for the complex?
502 ÷ 528 = .95 (95%) Occupancy Rate
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10. Market Indicators Sales volume—number and prices of homes sold
Multiple listing services
©2015 Kaplan, Inc.