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Unit 4:
The Real Estate Market
| Question | Answer |
|---|---|
| Short-term fluctuations | changes in business and economic activity that occur within the year. These changes in the economy affect financial and real estate markets. |
| business cycle | expansion (recovery or boom) and contraction (recession or bust) |
| expansion | contraction |
| peak | upper turning point of a business cycle |
| trough | lower turning point of a business cycle - gives buyers the best opportunity to purchase real estate, allowing absorption of oversupply to take place. |
| peak | when real estate supply growth slowly begins to exceed demand growth - most real estate participants do not recognize when a peak occurs because transactions are at their highest level of activity. |
| contracts | sales growth slows - During contraction, the entire region can experience bad loans, foreclosures, unemployment, and even recession. |
| __________ are periodic, irregular up-and-down movements in economic activity that take place over a period of two to six years. | Cycles |
| The characteristics of the expansion stage in a real estate market include: | speculators and increased accessibility to credit. |
| Which of the following are changes in the market in a consistent direction that occur over a long-term period? | Trends |
| command system | decisions regarding allocation are centralized |
| market system | the allocation decisions are relegated to buyers and sellers |
| In reality, there is no pure command or market system, but rather a combination of the two. | |
| market | may be defined as trade in a specified commodity. |
| This lack of similarity causes the real estate market to be inefficient and disorganized. | |
| Market segmentation | the process of identifying and analyzing submarkets within these larger markets. |
| submarket | geographic, economic, or specialized subdivision of a market. |
| petrol dollars | when oil is purchased from the OPEC countries. Fuel issues throughout the world affect availability of funds |
| Euro | currency used by 13 countries in the European Union. When the dollar rises in value, the reverse is true. This also has an important effect upon tourism. |
| Profitable Investment Opportunities. | Multiple residential units in fast-growing urban areas are popular with foreign investors. Companies such as Barratt American (English ownership) have become major builders in the United States. |
Created by:
Kids3
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