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.
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.
A chronological record of ownership transfers for a specific property, detailing all legal documents that have affected its title from its origin to the present day.
Commercial Real Estate (CRE) Market Analysis is the systematic process of evaluating market conditions, trends, and factors to assess the viability and potential performance of a commercial property investment.
Commercial Real Estate (CRE) risk assessment is the systematic process of identifying, analyzing, and evaluating potential threats and uncertainties that could impact the financial performance and value of a commercial property investment.
Common size analysis is a financial statement analysis technique where each line item is expressed as a percentage of a base figure, enabling comparison across different-sized properties or over various periods.
Comparable Sales (Comps) are recently sold properties similar in characteristics to a subject property, used to estimate its fair market value.
A Comparative Market Analysis (CMA) is an informal estimate of a property's value based on recently sold, active, and expired listings in the same area, used by real estate professionals to help buyers and sellers determine a competitive price.
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.
The Consumer Price Index (CPI) is an economic indicator measuring the average change over time in the prices paid by urban consumers for a market basket of goods and services, serving as a key gauge of inflation and purchasing power.
Consumer spending refers to the total money spent by households on goods and services, serving as a crucial indicator of economic health and directly influencing real estate markets.
A contingency clause in a real estate contract is a condition that must be met for the agreement to become legally binding, providing an escape route if specified terms are not satisfied.
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