Transcript Realo Estate Economics

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Chapter 19
ANTICIPATING CHANGE
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Today’s Real Estate Issues
 Recovery from the Financial Collapse of 2007
 The Recovery of Commercial Real Estate
 Financial System Recovery
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Other Real Estate Issues
 Land use controls change as society’s perception of
ideal land use evolves.
 The most important regulations appear to be in
environmental & pollution issues.
 Endangered species, drainage, water conservation &
government control of land use.
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The Consequences of the
Financial Collapse of 2007
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 Trust in U.S. Financial Instruments
 Increase in Regulation
 The Future of Real Estate Finance
 Deleveraging
 Managing the Economy and Asset Bubbles
 The Past and Future Role of Politicians
 Interest and Inflation Rates
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Problems Concerning Housing Specialists
 Environmentally regulated shortages of land and
materials.
 The strong cyclical variations in the cost and supply
of credit.
 Difficulty of maintaining older units.
 How to provide housing for elderly and low-income
people.
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Summary on the supply side of housing
 Restrict or stop issuing building permits related to
availability of water, sewage treatment, &
environmental restrictions.
 Public resistance to change.
 Availability and cost of materials.
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Trends
 Ups and downs of interest rate have a major
impact on the real estate markets.
 Swings impair the efficiency of real estate-related
businesses, increasing the cost to consumers.
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Housing
 There continues to be problems in providing
specialized housing for elderly, large, low income
families.
 The U.S. population is aging in terms of the total
percentage.
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The Uncertain Future
 Consumerism is growing
 People now are willing to express objections to the
goods and services provided.
 Disclosure laws and responsibilities are increasing.
 There is an increasing use of broker errors and
omission insurance and home warranty insurance.
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Real Estate Professionals
 Increased knowledge (education)
 Increased specialization
 Increases in size of the typical real estate
brokerage company
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National Changes
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Demographic Issues
Population Composition
Poverty
Homeownership
Elderly
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Lifestyle Changes
 Second homes
 Recreational resorts
 Bed and Breakfast inns
 Expensive restaurants
 Acreage home sites
 Luxury homes
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Issues
 Labor Force
 Political/Legal
 Land-Use Controls
 Consumerism
 Political Conflict
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Societal & Economic Changes Impact Land Use & Values
 The process of electronic technology is reshaping &
restructuring patterns of social interdependence &
life.
 Population growth has already been recognized as one
of the world’s most pressing current and future
problems.
 For religious and social reasons, population control is
quite controversial.
 The United States is the world’s energy-driven society
substituting other energy sources for human labor.
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The Uncertain Future
 Telemobility
 Population Growth
 Population Control
 Pollution and Global Warming
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What is in the future?
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