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.
Location strategy in real estate investing involves the systematic process of identifying and evaluating geographical areas to find properties that align with specific investment goals and market conditions, maximizing potential returns and minimizing risks.
Luxury real estate refers to high-end properties characterized by superior quality, prime locations, unique architectural design, extensive amenities, and a premium price point, often catering to affluent buyers and investors.
Machine Learning (ML) is a branch of Artificial Intelligence that allows computer systems to learn from data, identify patterns, and make predictions or decisions without explicit programming, revolutionizing data analysis in real estate investing.
Marginal Propensity to Consume (MPC) is an economic metric that quantifies the proportion of an increase in disposable income that a consumer spends on goods and services, rather than saving it.
A market bottom in real estate signifies the lowest point in property values within a market cycle, often preceding a period of recovery and appreciation, presenting strategic buying opportunities for investors.
Real estate market conditions describe the current state of property supply and demand, influenced by economic, social, and political factors, guiding investor decisions and property values.
A market correction is a short-term decline of 10% to 20% in the value of a market index or asset prices from their recent peak, often signaling a temporary pause or reversal in an upward trend.
Real estate market cycles are the recurring patterns of supply and demand fluctuations that influence property values, rents, and construction activity over several years.
Market equilibrium in real estate is the state where the quantity of properties supplied by sellers perfectly matches the quantity demanded by buyers at a specific price, leading to a stable market.
Market liquidity in real estate refers to the ease with which a property can be converted into cash without significantly impacting its price. It's a critical factor for investors assessing the flexibility and risk of their real estate holdings.
Market research in real estate is the systematic process of gathering, analyzing, and interpreting data about a specific market to make informed investment decisions, identify opportunities, and mitigate risks.
Market risk refers to the possibility of losses in real estate investments due to factors affecting the overall market, rather than specific property issues. These broad economic forces can impact property values, rental income, and investor returns.
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