Real Estate Supply and Demand Terminology
61 Questions
11 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the definition of demand?

  • The quantity of a product or service that individuals desire to purchase (correct)
  • The amount of buyers and tenants who wish to acquire property for sale or lease
  • The amount of a product or service currently available for sale
  • The measurement of property available for sale or lease

    • How does an increase in supply affect prices?

  • Prices fluctuate erratically
  • Prices tend to rise
  • Prices tend to decrease (correct)
  • Prices remain stable

    • What is the cycle of supply and demand?

  • High demand causes a decrease in supply
  • Unfulfilled demand leads to new supply construction which then contributes to market equilibrium (correct)
  • Market equilibrium results in excess demand
  • Oversupply leads to increased demand

    • In real estate, what does 'price' depend on?

    <p>Interaction between supply and demand</p> Signup and view all the answers

    How does an increase in demand impact prices?

    <p>Prices tend to rise</p> Signup and view all the answers

    What is oversupply in the context of supply and demand?

    <p>It indicates more supply than there is demand</p> Signup and view all the answers

    How does unmet demand contribute to the cycle of supply and demand?

    <p>It starts the cycle anew by absorbing existing supply</p> Signup and view all the answers

    What does 'supply' refer to in real estate?

    <p>Measurement of property available for sale or lease</p> Signup and view all the answers

    What impacts the value of a property according to the text?

    <p>Values of neighboring properties</p> Signup and view all the answers

    What does merging adjacent properties to generate an aggregate value surpassing individual values refer to?

    <p>Assemblage</p> Signup and view all the answers

    What does splitting a single property into smaller units potentially lead to?

    <p>Higher overall worth</p> Signup and view all the answers

    What do increases in building permits indicate according to the text?

    <p>Rising prices and construction</p> Signup and view all the answers

    Which factor plays a vital role in determining market dynamics?

    <p>Major employers' movements</p> Signup and view all the answers

    What do shifts in the economic base affect according to the text?

    <p>Vacancy rates</p> Signup and view all the answers

    How are decreases in vacancy rates interpreted according to the text?

    <p>Rising prices/rents</p> Signup and view all the answers

    What do increases in prices imply according to the text?

    <p>An increase in demand or decrease in supply, or both</p> Signup and view all the answers

    What happens to prices in real estate when there is an increase in demand?

    <p>Prices tend to rise</p> Signup and view all the answers

    How does oversupply affect the real estate market?

    <p>Causes market imbalance</p> Signup and view all the answers

    What is the impact of unfulfilled demand in the real estate market?

    <p>Additional supply creation</p> Signup and view all the answers

    In real estate, what does 'demand' refer to?

    <p>Quantity of buyers and tenants wishing to acquire property</p> Signup and view all the answers

    What does the cycle of supply and demand lead to in the real estate market?

    <p>Unmet demand</p> Signup and view all the answers

    How are prices determined in real estate according to the text?

    <p>Through the interaction between supply and demand</p> Signup and view all the answers

    What results from the construction of additional supply in the real estate market?

    <p>Market equilibrium</p> Signup and view all the answers

    What can an increase in building permits indicate?

    <p>Rising vacancy rates and construction</p> Signup and view all the answers

    How does the availability of labor force impact real estate market dynamics?

    <p>Influences market demand and supply balance</p> Signup and view all the answers

    What can shifts in the economic base affect in the real estate sector?

    <p>Demand for real estate</p> Signup and view all the answers

    How can assemblage impact the value of properties?

    <p>Generate a surplus value exceeding individual values</p> Signup and view all the answers

    What do increases in vacancy rates signify in the real estate market?

    <p>Declining prices/rents and a buyer's/tenant's market</p> Signup and view all the answers

    What is the impact of government regulations on real estate development activities?

    <p>Influence on supply-demand equilibrium</p> Signup and view all the answers

    What do decreases in prices imply in the real estate market?

    <p>Decrease in demand or increase in supply, or both</p> Signup and view all the answers

    What is the significant effect of major employers moving into an area?

    <p>Rising vacancy rates and declining prices/rents</p> Signup and view all the answers

    What happens to prices in the real estate market when there is an increase in demand?

    <p>Prices tend to rise</p> Signup and view all the answers

    How does oversupply impact the real estate market?

    <p>Construction stops until market equilibrium returns</p> Signup and view all the answers

    What is the most likely outcome of unmet demand in the real estate market?

    <p>Starting the cycle anew</p> Signup and view all the answers

    How do increases in supply affect prices in the real estate market?

    <p>Prices tend to decrease</p> Signup and view all the answers

    What is the result of unfulfilled demand in the real estate market?

    <p>Additional supply is constructed</p> Signup and view all the answers

    How are increases in building permits interpreted in the real estate market?

    <p>As an indicator of rising prices, decreasing vacancy, and increased construction activity</p> Signup and view all the answers

    What does the concept of 'progression and regression' in real estate suggest?

    <p>The value of a property is influenced by the values of neighboring properties</p> Signup and view all the answers

    How can the availability of labor force influence real estate market dynamics?

    <p>By affecting market equilibrium and demand-supply balance</p> Signup and view all the answers

    What is the impact of assemblage in real estate?

    <p>It generates an aggregate value exceeding individual property values</p> Signup and view all the answers

    How do shifts in the economic base affect the real estate sector?

    <p>By impacting demand for real estate due to changes in local industries or economies</p> Signup and view all the answers

    What does the term 'subdivision' refer to in real estate?

    <p>Splitting a single property into smaller units to increase overall worth</p> Signup and view all the answers

    How do decreases in vacancy rates affect the real estate market?

    <p>They signify a market favoring buyers/tenants and rising prices/rents</p> Signup and view all the answers

    How do increases in prices impact the real estate market according to the text?

    <p>They imply an increase in demand or decrease in supply, or both</p> Signup and view all the answers

    What can an increase in demand for real estate potentially lead to?

    <p>Rising property prices and limited supply options</p> Signup and view all the answers

    What is the impact of an increase in supply on prices in the real estate market?

    <p>Prices tend to decrease</p> Signup and view all the answers

    In the real estate sector, what is determined by the interaction between supply and demand?

    <p>Prices</p> Signup and view all the answers

    How does unmet demand affect the cycle of supply and demand in real estate?

    <p>It starts the cycle anew</p> Signup and view all the answers

    What does an increase in demand lead to in terms of prices in the real estate market?

    <p>Prices tend to rise</p> Signup and view all the answers

    When there is unfulfilled demand in real estate, what could it potentially lead to?

    <p>Construction of additional supply</p> Signup and view all the answers

    What is the likely result of an oversupply situation in the real estate market?

    <p>Ceasing of construction</p> Signup and view all the answers

    What happens when more supply is added to the real estate market?

    <p>Oversupply may occur</p> Signup and view all the answers

    How does the cycle of supply and demand start anew in real estate?

    <p>'For Sale' signs reappear</p> Signup and view all the answers

    What does the term 'plottage value' refer to in real estate?

    <p>The surplus value generated by merging adjacent properties</p> Signup and view all the answers

    How do increasing building permits typically affect the real estate market according to the text?

    <p>Point to a rise in vacancy, higher prices, and more construction</p> Signup and view all the answers

    What is one of the key factors influencing the equilibrium of supply and demand in real estate markets?

    <p>Availability of labor force</p> Signup and view all the answers

    In real estate, what do decreases in prices often indicate?

    <p>A decrease in demand or increase in supply</p> Signup and view all the answers

    What does the concept of 'assemblage' involve in real estate?

    <p>Merging adjacent properties to generate surplus value</p> Signup and view all the answers

    How can major employers moving into an area influence the real estate market equilibrium?

    <p>Significantly change the supply-demand balance</p> Signup and view all the answers

    What do increases in vacancy rates suggest about the real estate market conditions?

    <p>Favor buyers/tenants with declining prices/rents</p> Signup and view all the answers

    'Subdivision' in real estate refers to which of the following actions?

    <p>'Splitting a single property into smaller units</p> Signup and view all the answers

    Study Notes

    Supply and Demand

    • Supply refers to the amount of a product or service available for sale, lease, or trade
    • Demand refers to the quantity of a product or service that individuals desire to purchase, lease, or trade at any given moment

    Real Estate Definition and Measurement

    • Supply: amount of property available for sale or lease, measured in dwelling units, square feet, or acres
    • Demand: amount of buyers and tenants who wish to acquire property for sale or lease, measured in households, square feet, or acres
    • Price is determined by the interaction between supply and demand

    Effects of Supply and Demand on Price

    • Increase in supply: prices tend to decrease
    • Increase in demand: prices tend to rise
    • Cycle of supply and demand: unfulfilled demand leads to construction of additional supply, resulting in market equilibrium, but can lead to oversupply, causing construction to cease until market equilibrium returns

    Factors Affecting Supply and Demand of Real Estate

    • Cost and availability of financing
    • Accessibility of developable land
    • Construction costs and their fluctuations
    • Capacity of infrastructure to support growth
    • Governmental regulations and police powers affecting real estate development activities
    • Shifts in the economic base
    • Major employers' movements into or out of an area
    • Availability of labor force
    • Land availability

    Indicators of the Market

    • Vacancy rates: increases signify a market that favors buyers/tenants and declining prices/rents, while decreases signify a market that favors sellers/landlords and rising prices/rents
    • Building permits: increases indicate a decline in vacancy, along with increasing prices and construction
    • Prices: increases imply an increase in demand or decrease in supply, or both, while decreases imply a decrease in demand or increase in supply, or both

    Government Influence on the Real Estate Market

    • Local oversight and approval of new development
    • Local taxation jurisdiction
    • Federal impact on interest rates
    • Environmental laws and regulations
    • Local zoning authority

    Concept Explanations

    Progression and Regression

    • The value of a property is impacted by the values of neighboring properties

    Assemblage

    • Merging adjacent properties can generate an aggregate value that surpasses the individual values of each component, referred to as plottage value

    Subdivision

    • Splitting a single property into smaller units can potentially lead to a greater overall worth

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Description

    Test your knowledge on real estate supply and demand terms such as supply, demand, and price. Learn about the measurement of supply and demand in the real estate market.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser