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 (25 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.
Anchoring bias is a cognitive heuristic where an individual's decisions are overly influenced by an initial piece of information (the anchor), leading to skewed valuations, negotiations, and market analyses in real estate investment.
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.
Bottom fishing is an advanced real estate investment strategy involving the acquisition of undervalued assets during market downturns, anticipating a future market recovery for significant capital appreciation.
Build-to-Rent (BTR) refers to residential communities, typically single-family homes or townhouses, that are purpose-built by developers specifically for rental rather than for sale, offering a professionally managed, amenity-rich living experience.
Cap rate compression occurs when the capitalization rate for investment properties decreases, indicating that property values are rising faster than their net operating income (NOI), often driven by increased demand or lower interest rates.
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.
Confirmation bias is a cognitive bias where investors selectively seek, interpret, and recall information that confirms their pre-existing beliefs or hypotheses, often leading to flawed real estate investment decisions by ignoring contradictory evidence.
Contrarian investing is an advanced investment strategy where investors intentionally go against prevailing market trends and popular sentiment, buying assets when others are selling and selling when others are buying, believing the market is mispricing assets due to emotional or herd behavior.
Conversion ratio in real estate investing measures the efficiency of a process by quantifying the percentage of prospects or opportunities that successfully complete a desired action, such as converting a lead into a closed deal or an offer into an accepted contract.
Coworking property valuation is the specialized process of assessing the market value of flexible workspace assets, considering their unique operational models, revenue streams, and market dynamics distinct from traditional commercial real estate.
A temporary, short-lived recovery in asset prices during a prolonged bear market, often characterized by a lack of fundamental support and followed by a continuation of the downtrend.
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.
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