the four elements that create value
Demand
Utility
Scarcity
Transferability (Effective Purchasing Power)
categories of external market forces that influence real estate values
Governmental
Economic
Social
Environmental
List at least 10 external market forces that influence value
...
Give illustrations of how external market forces can influence value
...
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.
Desire
In economics, the ability of a product to satisfy a human want, need, or desire.
Utility
The ability of a property or building to be useful and to perform the function for which it is intended according to current market tastes and standards; the efficiency of a building's use in terms of architectural style, design and layout, traffic patte
functional utility
The present or anticipated undersupply of an item relative to the demand for it. Conditions of scarcity contribute to value.
Scarcity
The ability of an individual or group to participate in a market, i.e., to acquire goods and services with cash or its equivalent.
Effective Purchasing Power
Planning
Zoning
Building Codes
Environmental restrictions
Taxes
Utilities
Transportation
Education
Cultural
Parks and recreation
Police
Fire protection
Public Safety
Governmental Forces
Most community planning did not occur until
the 1960s and 1970s
one of the strongest determinants of value
Zoning
A strong _____________ can result in properties that meet health and safety standards.
building code
This agency is charged with monitoring coastal habitats, such as estuaries and reefs. It also monitors development, water and sediment contamination, water diversion for industrial, agricultural, sedimentation, and dredging and filling activities.
They al
National Oceanic & Atmospheric Administration (NOAA)
Their mission is planning, designing, building and operating water resources and other civil works projects including:
Navigation
Flood control
Environmental protection
Disaster response
Ecosystem restoration
Wetlands and waterways regulation & permitting
U.S. Army Corps of Engineers
Some of their major duties include:
Developing and enforcing regulations
Offering financial assistance
Performing environmental research
Sponsoring voluntary programs and partnerships
Furthering environmental education
Publishing information
Environmental Protection Agency (EPA)
Each state has its own department that controls environmental issues.
http://www.okcc.state.ok.us/
http://www.deq.state.ok.us/
the second major category of external forces that influence real estate values.
tend to be the most powerful and exert the most influence on value of any of the four categories
National economy
Consumer Price Index
Interest rates
Availability of financing
Economic Forces
one measure of price pressures or inflation
it does track the cost-of-living in various areas around the country.
Consumer Price Index
site provided by the National Association of REALTORS. It will allow you to directly compare the cost of living in various cities.
http://www.homefair.com/real-estate
The total cost of construction in an area, be it residential or commercial construction, is really an amalgam of three factors
Land costs
Materials costs
Labor costs
We said that net income is a function of income minus expenses. Some of those expenses include:
Utilities
Taxes
Insurance
Maintenance
Supplies
Employees
The third major category of influences
Population trends
Population migrations
Ages
Family formations
Lifestyle changes
Social Influences
Overview of Chapter 12
We will start by delineating the four elements that create value. These are:
�Demand
�Utility
�Scarcity
�Transferability
Then we will discuss in detail the four categories of external market forces that influence real estate values.
U.S. Bureau of the Census
The generation born between 1946 and 1964 - is fueling the fastest growing segment of the American population. They are wealthy, controlling about 70% of the nation's wealth and 50% of all discretionary income.
The Baby Boomers