REAL 1820 Lecture Notes - Lecture 1: Capital Market, Housing Tenure
9 Apr 2016
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Document Summary
Many diferent types of assets in life where real estate is a big asset in everyday life. This is because: both a consumpion and an investment good- consumpion good: providing services for family. Investment good: the single largest asset for many households(investment): fixed locaion: no two home share the same spot. Locaion-speciic goods and services- access to jobs, neighbourhood quality, school quality, etc. Implicaions: real estate markets segmented and localized: heterogeneity: no two units are the exactly the same. Many diferent characterisics(size, age, bedrooms, bathrooms, ireplace, basement, yard. Implicaions: high search costs: durable: long life of real estate, large economics unit: infrequent purchase; access to the capital market is important: mortgage usually required. Implicaions: mortgage market condiions (mortgage rate ad credit availability) inluence housing price: extensive government regulaions: e. g. zoning laws; building costs. Implicaions: governments can afect real estate supply and demand. Low density: single family, semi detached or stand alone.
