REAL 1820 Lecture Notes - Lecture 1: Voer, Uptodate, Convenience Store
4 Feb 2020
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Document Summary
Real estate has many distinctive characteristics, different from other assets. Real estate: both a consumption and an investment good: Consumption good: providing services (as a shelter) for family. Investment good: the single largest asset for many households. House price appreciation: price goes up voer time: fixed location: no two homes share the same spot. Location specific goods and services acess to jobs, neighbourhood quality, school quality etc. Implications: real estate markets segmented and localized: heterogeneity: no two units are exactly the same. Many reasons: physical characteristic (size, age, bedrooms, bathrooms, fireplace, basement, etc) location. Long life of real estate: large economic unit. Infrequent purchase: access to the capital market is important: mortgage usually required. Implications: mortgage market conditions (eg. mortgage rate and credit availability) influence housing price: extensive government regulations. Implications: governments can affect real estate supply and demand. Classification of real estate by use residential type.
