Unit 3

Suppose you live and work in the north-central U.S. Which of the following factors would have a direct impact on property at the local level?

A change in zoning ordinances

What is your farm area?

A targeted area or market demographic in which you plan to cultivate your business

Which of the following is an event that has a direct impact on property?

An increase in tariffs for overseas purchases *Builders required by the state to recycle *aluminum during demolition Closure of national parks Restriction of refugees permitted to enter the United States

How does the consumer provide economic support to a community in the living phase of the real estate cycle?

By purchasing and consuming local goods and services

A new business moves into town, significantly increasing the availability of good paying jobs. How is this likely to affect the town's housing market?

Demand will go up, creating a seller's market.

Which of the following is not one of the guidelines for marketing to your sphere?

Don't advertise anywhere else.

Now we're talking! Public confidence is increasing, and we're finally starting to see some properties moving. More buyers in the market mean a reduction in the high number of properties that have been sitting on the market.

Expansion

when does the real estate downcycle usually occur?

From mid-November through the end of December

Which of the following statements is true about national lending intuitions?

Mortgage-backed securities are offered by credit unions. They control the flow of the local money supply. They fund loans to borrowers. *They sell packaged loans to investors.

In the resource, Maddie talks about real estate being cyclical and having its ups and downs. What can you expect to see during a downcycle?

No one is buying and no one is selling.

Which of the following best describes the state of the market during the over supply phase of the real estate cycle?

Properties selling for more than their appraised value, many buyers in the market, and lots of new construction

In which phase of the real estate market would you expect to see unemployment and foreclosures remain high but begin to stabilize?

REcovery

Is that the light at the end of the tunnel? Things in the real estate market are starting to improve. Foreclosures are still high, but not increasing. The same is true with unemployment. The public is still generally uneasy about the economy, but we've made it through the worst.

Recovery

When both supply and demand increase, what tends to happen to prices?

Stay the same

True or False: Selling mortgage-backed securities provides national institutions in the secondary market with additional funds to continue purchasing loans from local lenders.

True

True or False:The secondary market may act as a balancing mechanism by making money available in hot local markets and providing a safe avenue for cold local markets to unload excess funds.

True

True or false: Secondary mortgage market players purchase securities from investors, then package and resell them to local lenders.

false

The primary market tends to align with the _________ market. This is where consumers would typically go to do business (i.e., obtain a loan). such as:Bank, Thrift, Credit Union, Mortgage co

local

In what phase of the real estate cycle do foreclosures rise and home prices fall?

recession

The _____________ market is where the local/primary market goes to do business. Such as Fannie Mae, Investment banking, private investors, home loan banks

secondary

True or false: Local lenders may sell loans they have issued to national institutions as a way to generate more money to make additional loans.

true

During the _______ phase, the market begins to bottom out. We see home prices fall, while foreclosures increase. During the _____________ phase, things start to improve, and they continue improving until the end of the ________ phase, when the market peaks. We see the market begin to make a downturn during the _________ phase, when buyers are over-paying and activities are occurring at a rapid rate, which is not sustainable. Then the cycle begins anew.

During the recession phase, the market begins to bottom out. We see home prices fall, while foreclosures increase. During the recovery phase, things start to improve, and they continue improving until the end of the expansion phase, when the market peaks. We see the market begin to make a downturn during the over supply phase, when buyers are over-paying and activities are occurring at a rapid rate, which is not sustainable. Then the cycle begins anew.

As unemployment decreases, more and more buyers enter the market looking to purchase homes. The number of homes does not meet buyer demand, so new home construction increases to boost the supply. Multiple buyers may be after the same property, causing bidding wars, which drive up prices.

Over supply

In which phase of the real estate market would you expect to see properties selling for more than they're worth, many buyers in the market, and lots of new construction?

Over supply

Several different phases make up the real estate cycle. What are they?

Oversupply Recession Expansion Recovery

Oy! When are things in the real estate market going to pick up? There are so many houses on the market, with many sitting vacant because everyone is too scared to buy. This does nothing to help the increasing number of foreclosures. Deals can be had for those who are ready to buy, however. During this phase, prices tend to fall in order to encourage home shoppers to buy.

Recession