ch. 15 the real estate market and analysis Flashcards

ch. 15 the real estate market and analysis Flashcards ____ is the amount and type of real estate available for sale or rent at differing price levels in a given real estate market.supply Market indicators include price levels, vacancy rates, and sales volume.t/f The statement is true. Price levels are indicators of new housing supply and demand for certain price ranges, vacancy rates indicate the need and demand for housing in a certain market, and sales volume can be used in estimating the direction and rate of growth.

• Which characteristic does NOT describe the real estate

market?A. Land is indestructible.B. The market is quick to respond to changes in supply and demand.C. Real estate is heterogeneous.D. Real estate is immobile.

• The market is quick to respond to changes in supply and

demand.The availability of land influences supply.t/f The statement is true. The variables that influence supply are the availability of skilled labor; construction loans and financing, land, and materials.the premium paid for location preference is _____.situs

• The economic characteristic that refers to preference for

a certain loation owing to various factors such as climate, employment outlook, public schools, and so forth is calledA. highest and best useB. vacancy ratesC. sales volumeD. situs

• situs

the highest and best use of land is the use that generates the most ___ to the land and improvements.return a 400 unit apartment building currently has 350 units occupied. what is the buildings vacancy rate?400-350=5050/400=0.125 or 12.5% vacancy rate when the supply increases relative to demand, prices go ___.down Supply and Demand (supply or demand?)a. available mortgage creditb. availability of landc. price of real estated.availability of skilled labore. consumer preferences

• demandb. supplyc. demandd. supplye. demand

when demand increases relative to supply, prices go ___.up a ____ market exists when demand exceeds supply. sellers Which data is the LEAST helpful as a real estate market indicator?A)Vacancy rate of rental unitsB)Zoning regulationsC)Number of building permits issuedD)Number of houses sold and price levels The answer is zoning regulations. Good market indicators include data regarding price levels and building permits issued, vacancy rates, and sales volume.there are 180 apartments rented in a 225 unit apartment building.w hat is the buildings occupancy rate?180/225=0.8. or 80% Which characteristic is NOT a physical characteristic of real estate?A)Land is immobile.B)The market is slow to respond to change in supply and demand.C)Land is

durable.D)Real estate is nonhomogeneous.The answer is the market is slow to respond to change in supply and demand. The market is slow to respond to change in supply and demand is an economic

characteristic of real estate.

• Which statement is FALSE regarding the relationship

between price and demand?A. An increase in price causes a decrease in demand.B. A decrease in price causes an increase in demand.C. There is an inverse relationship between price and demand.D. An increase in price causes an increase in demand.

• An increase in price causes an increase in demand.

Which characteristic does NOT describe the real estate market?A)Land is homogeneous.B)The market is slow to respond to changes in supply and demand.C)The government uses indirect controls.D)Land is indestructible.The answer is land is homogeneous. Real estate is heterogeneous; no two tracts of land are identical.Of a 430-unit apartment building, 387 units have been rented out. The building's occupancy rate is 85%.t/f The statement is false. 387 ÷ 430 = .90 occupancy rate

• The durability of land refers to land'sA. immobility.B.

homogeneity.C. indestructibility.D. situs.

• indestructibility.

The real estate market is unusually slow to respond to changes in supply and demand.t/f The statement is true. When the equilibrium between supply and demand is upset, it can be years before the imbalance is corrected.When fewer buyers are competing for a large supply of homes what type of market results?A)Buyer's marketB)Seller's marketC)Highest and best use is in transitionD)Vacancy rates are depleted The answer is buyer's market. When the supply and demand equilibrium is upset by excess supply, a buyer's market develops.

• One person or a group of persons occupying a separate

housing space is technically defined as aA. unit.B.household.C. family.D. multiple ownership unit..B. household.Consumer taste or preferences is a variable that influences demand.t/f The statement is true. The variables that influence demand include the price of real estate, population numbers and household composition, income of consumers, availability of mortgage credit, and consumer taste or preferences.One person or a group of persons occupying a separate housing space is technically defined as aA)household.B)unit.C)multiple ownership unit.D)family.The answer is household. A household, as defined by the U.S. Census Bureau, is any person or group of persons occupying a separate housing space.

• Factors affecting the supply side of the real estate

market do NOT include the availability ofA. land.B. skilled labor.C. material.D. mortgage credit.

• mortgage credit.

Which statement is FALSE regarding the relationship between price and demand?A)An increase in price causes an increase in demand.B)There is an inverse relationship between price and demand.C)An increase in price causes a decrease in demand.D)Decrease in price causes an increase in demand.The answer is an increase in price causes an increase in demand. An increase in price causes a decrease (not an increase) in demand.

• The uniqueness of real estate is also called land'sA.

immobility.B. nonhomogeneity.C. indestructibility.D. fixed location.

• nonhomogeneity.

• Which statement is NOT associated with the economic

concept of demand?A. Demand is the desire and ability to purchase or lease goods and services.B. Changes in price cause an inverse change in demand.C. Consumer preferences influence demand.D. The availability of building materials influences demand.

• The availability of building materials influences demand.

The barometer of the real estate market is considered to be theA)cost and availability of credit.B)change in consumer tastes.C)number of housing starts.D)change in consumer income.The answer is cost and availability of credit. The barometer of the real estate market is considered to be the cost and availability of credit The land use that generates the MOST income to the land and improvements is calledA)durability of land.B)situs.C)economic use.D)highest and best use.The answer is highest and best use. The highest and best use of land is the use that generates the most return (income) to the land and improvements compared with alternative uses.list the physical characteristics of real estate1. land is ____.2. land is ____.3. land is ____.immobile (fixed), indestructible (durable), unique (non homogeneous)

• When the equilibrium of the real estate market is upset

by excess supply,A. builder activity increases in response to the need.B. a seller's market exists.C. a buyer's market exists.D. demand decreases

• a buyer's market exists.

There are 315 apartments rented in a 350-unit apartment building. What is the building's occupancy rate?A)95%B)75%C)90%D)80% The answer is 90%. 315 rented units ÷ 350 total units = .90 or 90% occupancy rate.

• Some 280 apartments are rented in a 350 unit apartment

building? What is the building's occupancy rate?A. .20B.

.70C. .80D. .85

C. .80280/350=.8

A seller's market develops when the supply and demand equilibrium is upset by excess demand.t/f The statement is true. Whenever the supply and demand equilibrium is upset by excess demand, a seller's market develops. Whenever the supply and demand equilibrium of a market is upset by excess supply, a buyer's market develops.characteristics of real estate market (characteristic or not)a.land is indestructableb. no standard productc. quick response to supply/demandd. land is unique (not homogeneous)e. land is immoble

• characteristicb. characteristicc. not a characteristicd.

characteristice. characteristic ___ is the desire and ability to purchases or ent goods and services.demand price and demand are ____ related.inversely When the equilibrium of the real estate market is upset by excess demand,A)demand decreases.B)builder activity decreases in response to the need.C)a buyer's market exists.D)a seller's market exists.The answer is a seller's market exists. When the supply and demand equilibrium is upset by excess demand, a seller's market exists..What is a building's vacancy rate if 621 units are rented in a 690-unit building?A)90%B)25%C)10%D)75% The answer is 10%. 690 total units - 621 rented units = 69 vacant units. 69 units ÷ 690 total units = .10 or 10% vacancy rate.