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.
The foreclosure rate is a key economic indicator representing the percentage of mortgage loans that are in some stage of foreclosure within a given period, reflecting housing market health and financial distress.
Functional obsolescence refers to the loss in property value due to an outdated design, inadequate utility, or undesirable features that no longer meet current market standards or buyer preferences. It can be curable or incurable, significantly impacting a property's marketability and investment potential.
Fundamental Economic Value (FEV) represents the intrinsic worth of a real estate asset, derived from its ability to generate future income and its underlying economic utility, independent of short-term market fluctuations.
Gentrification is the process of renovating and improving a neighborhood, attracting more affluent residents and businesses, which often leads to the displacement of existing lower-income communities due to rising costs.
Geographic diversification is a real estate investment strategy that involves spreading investments across different geographical regions or markets to mitigate localized risks and enhance portfolio stability and potential returns.
A Geographic Information System (GIS) is a framework for gathering, managing, and analyzing data, connecting data to a map to integrate location information with descriptive data. In real estate, it enables investors to visualize, analyze, and interpret market trends, property values, and demographic patterns for informed decision-making.
Global Food Demand refers to the total worldwide requirement for food, driven by population growth, rising incomes, and dietary shifts. For real estate investors, it signals opportunities in agricultural land, food processing facilities, and logistics infrastructure.
Government intervention in real estate refers to actions taken by public authorities to influence property markets, including monetary and fiscal policies, as well as direct regulations like zoning and rent control, impacting investment viability and market dynamics.
Gross Domestic Product (GDP) is the total monetary value of all finished goods and services produced within a country's borders in a specific time period, typically a year or quarter.
A growth market in real estate refers to a geographic area experiencing significant and sustained increases in population, job opportunities, and property values, driven by strong economic and demographic trends.
Herd mentality in real estate refers to the tendency of investors to follow the actions of a larger group, often ignoring their own analysis or fundamental market indicators, leading to market bubbles or crashes.
Highest and Best Use refers to the reasonably probable and legal use of a property that is physically possible, financially feasible, and results in the highest value, guiding optimal property utilization and investment decisions.
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