Real Estate ch.1 Q

If we desire to classify land by its use, land that does not include any improvements to the land would be categorized as:

"Raw" land

Real estate markets tend to be highly segmented due to the heterogeneous nature of the products. Which of the following examples depicts this issue of market segmentation?

A couple searching for a single-family detached unit has limited their search to be in a specific price range between $350,000 and $400,000.

Real estate values derive from the interaction of three different sectors in the economy. Which of the following sectors serves to allocate financial resources among households and firms requiring funds?

Capital market

Considered a fundamental pricing metric in commercial real estate markets, the ratio of a property's annual net income to its market value is more commonly referred to as a(n):

Capitalization rate

Equity investors can choose to participate indirectly in real estate markets by purchasing shares in publicly traded real estate companies. In doing so, investors benefit from all of the following EXCEPT:

Highly segmented markets

Real estate is defined as land and its permanent improvements. Which of the following is an example of an improvement to the land?

Sewer system

The demand for real estate derives from the need that market participants (e.g., owner occupants, tenants, renters) have for shelter and convenient access to other locations. This competition for physical location and space occurs in the:

User Market

When viewed as a tangible asset, real estate can be defined as the land and its permanent improvements. Improvements on the land include:

fences

A primary determinant of the feasibility of new construction is the relationship between the current level of property prices and the cost of new construction. We would expect the supply of properties to:

increase if current property values are greater than the cost of construction

Capital markets can be divided into four main categories: private equity, public equity, private debt, and public debt. An example of a real estate asset that trades in the private equity market is:

real property