Population Trends The study of population trends comes right down to the

Chapter 12 Influences on Real Estate Values Flashcards Population TrendsThe study of population trends comes right down to the supply and demand again. If people are moving into an area, it will create a demand for housing and services. If people are leaving an area, they will leave behind an oversupply of houses and a diminished need for services.The prime source for population demographics is the U.S. Bureau of the Census. The formal census is only taken every 10 years, but the Bureau does an annual update for the in-between years. This information is usually available on a regional or local basis, as well, through various planning agencies and chambers of commerce.You might just as well go to the horse's mouth. Most of the local information is derived from studies of the Census Bureau.Click here to go to the Census Bureau website.One of the most interesting categories on the homepage is headed "People & Households" (which is located at the very bottom center of page). I would recommend clicking on the links to "Population Estimates" and "Population Projections." You could easily spend a week or two wandering through all that data.You also might want to notice the population clock in the upper right corner that keeps a running total of the population for the U.S. and the rest of the world.To the right of that is a box labeled "Quick Facts." Put in your state, city or municipality to get some quick figures.DesireDesire is defined as"A purchaser's wish for an item to satisfy human needs (e.g. shelter, clothing, food, companionship) or individual wants beyond essential life-support needs."I have had a burning desire for quite a while to own a Porsche 928 Turbo (preferably red).Unfortunately, it is an empty dream. It is a desire but can't really be called demand - I lack the purchasing power to back up my desire.So for any economic good to have value there must be desire. Imagine one acre of desert in the middle of hundreds of thousands of acres of desert - and the nearest road is 80 miles away. It is possible (nay, likely) that no one has any desire to purchase or own this acre. If no one wants to buy it, there is no value. It is worthless land.Parks and RecreationThe availability of parks and recreational facilities can be dependent upon any or all levels of government. Perhaps there is a national park or national recreation area nearby.

Maybe there is a state park with camping, swimming and hiking.There might also be a county, town, village, or city park and recreation area. These may include play areas for children and facilities for specific activities such as golf, soccer, fishing, or cross-country skiing.Even though these areas are not on a property or within the property's view, they can provide a beneficial aspect to a property. Being five minutes away from a state park or a municipal golf course can be an added inducement to homebuyers. It may also provide an additional reason for a business to settle nearby. Obviously, there would be a demand for a ski shop near a ski slope or a boat dealership or a bait and tackle shop near a large lake.Baby BoomersYou no doubt are aware of the influence of the Baby Boomers. That generation has been described as a bulge

moving through the system, as a result of a large number of babies born after the veterans returned from the Second World War.They have had a large influence on the economy and many are now reaching retirement age. How will this affect real estate values and the types of houses that are being built?In 2001, the first wave of baby boomers turned 55, which was significant because according to the Fair Housing Law, at age 55, a buyer is eligible to live in a legally "age-restricted" community.The home building industry is feeling the impact of this demographic surge and seeing a growing demand for active adult housing which meets the needs, demands, and lifestyle of this unique generation.The nation first became aware of the baby boomers as a group with an impact in the late 1960s, and they have been making their impression on the American culture, economy, and lifestyle ever since.They are wealthy, controlling about 70% of the nation's wealth and 50% of all discretionary income.In 2011, the oldest members of the Baby Boom generation began to turn 65 years of age. Beginning on January 1, 2011, approximately 10,000 baby boomers will reach age 65 every day for the next 19 years.In 2010, only 13% of Americans were age 65 or older. By 2030, 18% of the nation will be at least 65 years of age.

This first list would include things such as how convenient

is the subject location in regard to:

ShoppingSchoolsEmploymentHouses of worshipCultural facilitiesRecreational facilitiesEducational facilitiesRestaurantsPolice protectionFire protection Expense LevelsPreviously, we said that net income is a function of income minus expenses. Some of those expenses

include:UtilitiesTaxesInsuranceMaintenanceSuppliesEmplo

yeesThe costs of all these items can vary from region to region and locale to locale. You want to do some research to find out if the costs of energy, for example, are above or below the norm. We already said the cost of taxes and insurance will vary according to local influences.There are national studies available online to which you may subscribe, or publications you may purchase, which track these expenses on a national basis.UtilityFor an economic good to have value, it must have utility.Utility is defined as"In economics, the ability of a product to satisfy a human want, need, or desire."It has to be good for something - it has to have a purpose. You have to be able to use it.Imagine a piece of land that is almost perpendicular, on a rocky mountainside; or land that is in the middle of an impenetrable swamp; or landlocked land atop a mountain.If nobody can figure out a way to use these land parcels, they have no value. No one wants them

• at any price.

U.S. Army Corps of EngineersTheir mission is planning, designing, building and operating water resources and other civil works projects

including:NavigationFlood controlEnvironmental

protectionDisaster responseEcosystem restorationWetlands and waterways regulation & permittingThey keep the canals running and dredge the rivers. They occasionally make the news, especially after a major hurricane or flood or other natural disaster.They also must be consulted when damming up a stream on private lands or dredging any wetland areas.ScarcityScarcity is defined as"The present or anticipated undersupply of an item relative to the demand for it.Conditions of scarcity contribute to value."Scarcity usually triggers demand. The more scarce an item is, the more valuable it is likely to be.Think of sales or auctions of paintings by Rembrandt or Van Gogh or Stradivarius violins. There are only so many of them and more will never be produced.Many more people want one of those paintings or violins than are available. When one comes on the market, the bidding starts. Apparently this is real demand, as quite a few people are able to afford them.On