2021 Arizona Real Estate Salesperson Exam Lesson 5: Real Estate Economics

Real Estate Exam Lessons for the Audio Learner

Here is the 2021 Arizona Real Estate Salesperson Exam Lesson 5: Real Estate Economics 2021 Arizona Real Estate Salesperson Exam Lesson 5: Real Estate Economics Here is a free lesson for the 2021 Arizona Real Estate Salesperson Exam Lesson 5 . The full series of lessons is available at the Website https://www.reexampodcast.com Real Estate Economics Supply = how much of a product or service is available Demand = how much of a product people want If supply increases, price decreases. If demand increases, price increases. Market equilibrium: when supply and demand are balanced. Economic Characteristics of Real Estate • It is governed by supply, demand. • It has durability • Heterogeneity • High Transaction costs • Long time delays • Both an investment good and an consumption good. • Immobility • It has inherent value • It has unique appeal • It is illiquid • It has a slow response to cycles • The market is decentralized • Depreciation vs. Appreciation • Strait-Line (Cost - salvage value)/Useful life • Double Declining Balance = Beginning book value x Rate of depreciation • Units of Production (Not used in real estate) • Sum of Years Digits (Remaining life/Sum of the year’s digits) x (Cost - Salvage Value) • Demographics affect demand. • Types of demographics • Population size/growth • Family size • Age and Family makeup • Death rates • Marriage and Divorce rates • Housing supply is produced using land, labor, and materials. The supply is determined by the cost of those materials, the price of existing houses, and the technology that produces them.