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 (28 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.
A market condition where the quantity of available real estate (supply) does not match the quantity buyers are willing and able to purchase (demand) at current prices, leading to shifts in property values and rents.
A target market in real estate investing refers to a specific group of potential tenants or buyers, or a particular property type or geographic area, that an investor aims to serve or acquire based on detailed analysis.
The rate at which tenants move out of rental properties, requiring landlords to find new occupants. It's a critical metric for assessing property management efficiency and financial performance.
The Terminal Cap Rate is the estimated capitalization rate used to project a property's sale price (reversionary value) at the end of a future holding period, a critical input in Discounted Cash Flow (DCF) valuation.
A tourist destination market refers to real estate investment opportunities in areas characterized by high visitor traffic, often driven by leisure, business, or cultural attractions, leading to demand for short-term rentals, hotels, and related services.
Trailing 12 Months (T-12) is a financial report that aggregates a property's income and expenses over the most recent 12-month period, providing a current and accurate snapshot of its operational history for investment analysis.
Undervaluation in real estate refers to a property being priced below its true market value, presenting a potential opportunity for investors to acquire assets at a discount and realize significant returns.
The unemployment rate is a key economic indicator that measures the percentage of the total labor force that is actively seeking employment but unable to find a job.
The vacancy rate is the percentage of all available rental units in a property or market that are currently unoccupied or not generating income, serving as a key indicator of a property's financial health and market demand.
A valuation discrepancy occurs when there is a significant difference between the perceived value of a real estate asset (e.g., buyer's offer, seller's asking price) and its appraised value, often impacting financing and deal closure.
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.
Virtual Reality (VR) in real estate uses immersive 3D simulations to allow users to virtually experience properties and spaces remotely, enhancing marketing, sales, and development visualization.
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