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Intermediate terms

Housing Market Slowdown: Essential Terms

Explore key terms that might be helpful when navigating current housing market trends, including slowing home price growth and regional declines. This carefully curated collection provides concise explanations of commonly referenced concepts, offering a quick reference to understand market dynamics without comprehensive coverage.

Learning Path

1

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
2

Existing Homes

Existing homes are properties that have been previously owned and occupied, distinguishing them from newly constructed properties. They represent the vast majority of real estate transactions and offer unique investment opportunities.

Beginner5 min
3

New Construction Homes

New construction homes are properties that have been recently built and have never been occupied. They offer modern features, energy efficiency, and the opportunity for customization, appealing to both homeowners and real estate investors.

Beginner5-6 min
4

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
5

Appraisal

An appraisal is an unbiased, professional opinion of a property's market value, conducted by a licensed appraiser, primarily used for lending, buying, and selling decisions.

Intermediate14-15 min
6

Months of Supply

Months of Supply (MOS) is a key real estate metric that indicates how long it would take for all current homes on the market to sell, given the current sales pace, assuming no new homes are added. It's a crucial indicator of market balance.

Intermediate5 min
7

Real Estate Investment Strategy

A real estate investment strategy is a structured plan outlining an investor's approach to acquiring, managing, and disposing of properties to achieve specific financial objectives, considering risk tolerance and market conditions.

Intermediate11-12 min
8

Affordability

Affordability in real estate refers to a buyer's ability to comfortably manage the costs associated with purchasing and owning a property, considering their income, debts, and current market conditions.

Beginner5 min
9

Economic Indicators for Real Estate

Economic indicators are statistical data points that provide insights into the overall health and direction of the economy, influencing real estate market trends, property values, and investment decisions.

Intermediate8-9 min
10

Housing Market Trends

Housing market trends refer to the general direction in which the real estate market is moving, influenced by factors like supply, demand, interest rates, and economic conditions. Understanding these trends is crucial for making informed investment decisions.

Intermediate5 min
11

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
12

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
13

Real Estate Recession

A real estate recession is a significant and sustained decline in real estate market activity, characterized by falling property values, reduced transaction volumes, and increased foreclosures, often linked to broader economic downturns.

Intermediate5-6 min
14

Year-over-Year (YoY) Change

Year-over-Year (YoY) change measures the percentage change in a specific metric, like property values or rental income, compared to the same period in the previous year. It helps investors understand trends by smoothing out seasonal fluctuations.

Beginner2-3 min
15

Home Price Appreciation

Home price appreciation refers to the increase in a property's market value over a period, driven by various economic, demographic, and local market factors, leading to capital gains for investors.

Intermediate5-6 min
16

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
17

Regional Market Analysis

Regional Market Analysis is the process of evaluating economic, demographic, and real estate-specific factors within a defined geographic area to identify investment opportunities and assess risks.

Intermediate5 min
18

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
19

Comparative Market Analysis

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.

Intermediate15-18 min
20

Market Correction

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.

Intermediate6 min