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Intermediate terms

Essential Market Cycles & Economic Indicators Terms

This curated collection includes key terms that might be helpful when exploring market cycles and economic indicators. It covers the macroeconomic factors that influence property values, rental demand, and overall market health. These terms were selected based on common questions and areas where investors often need clarity.

Learning Path

1

Real Estate Permits

Real estate permits are official government authorizations required for construction, renovation, or alteration of property, ensuring compliance with building codes, zoning laws, and safety standards.

Intermediate15-18 min
2

Median Home Price

The median home price is the middle value of all homes sold in a specific area during a given period, with half of sales occurring above and half below this price. It provides a reliable indicator of typical home values and market health for real estate investors.

Beginner15 min
3

Absorption Rate

The absorption rate measures the pace at which available properties are sold or leased in a specific market over a given period, indicating the balance between supply and demand.

Intermediate13-14 min
4

Economic Indicators

Key data points that reveal insights into the current and future health of an economy, used by real estate investors to forecast market trends, assess risk, and inform investment decisions.

Intermediate13-14 min
5

Recession

A recession is a significant, widespread, and prolonged decline in economic activity, typically characterized by negative Gross Domestic Product (GDP) growth, rising unemployment, and reduced consumer spending, impacting real estate markets through decreased demand and property values.

Intermediate14-15 min
6

Consumer Price Index

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.

Intermediate15-18 min
7

Monetary Policy

Monetary policy refers to actions taken by a central bank, like the Federal Reserve, to manage the money supply and credit conditions, influencing interest rates, inflation, and ultimately, the real estate market.

Intermediate13-14 min
8

Vacancy Rate

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.

Beginner13-14 min
9

Interest Rates

The cost of borrowing money or the return on invested capital, expressed as a percentage of the principal over a specific period, significantly impacting real estate investment profitability and financing decisions.

Intermediate11-12 min
10

Mortgage Rates

Mortgage rates are the interest percentages charged on real estate loans, determining the cost of borrowing and significantly impacting monthly payments and investment profitability.

Intermediate15-18 min
11

Job Growth

Job growth refers to the increase in employed individuals within a geographic area, serving as a key economic indicator for real estate investors to gauge market health, demand for properties, and potential for appreciation and rental income.

Intermediate12-13 min
12

Peak Phase

The Peak Phase is the highest point in a real estate market cycle, characterized by maximum property values, strong demand, and robust economic activity, just before a market downturn or correction.

Intermediate13 min
13

Expansion Phase

The Expansion Phase is a period within the real estate market cycle marked by sustained economic growth, increasing demand, rising property values, and robust construction activity.

Intermediate13 min
14

Supply and Demand

Supply and demand are fundamental economic principles describing the interaction between the availability of real estate (supply) and the desire for it (demand), which collectively determine property prices and market conditions.

Intermediate13-14 min
15

Real Estate Market Cycle

The Real Estate Market Cycle refers to the recurring, non-linear pattern of expansion and contraction that characterizes real estate markets, driven by economic, demographic, and supply-demand factors.

Intermediate16 min
16

Contraction Phase

The contraction phase is a stage in the real estate market cycle characterized by declining property values, reduced sales volume, and increased inventory, typically following a market peak and preceding a trough.

Intermediate15 min
17

Federal Funds Rate

The Federal Funds Rate is the target interest rate for overnight lending between commercial banks, influenced by the Federal Reserve to manage inflation and employment, and serving as a benchmark for other interest rates, including mortgages.

Intermediate12-15 min
18

Gross Domestic Product (GDP)

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.

Intermediate14-15 min
19

Recovery Phase

The Recovery Phase is a stage in the real estate market cycle following a downturn, characterized by stabilizing prices, increasing transaction volumes, and a gradual return of investor confidence, signaling the beginning of an upward trend.

Intermediate13-17 min
20

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, leading to a decrease in the purchasing power of currency over time.

Intermediate14-15 min