CE shop Unit 3 questions/TF

Supply is high and demand is low

Buyer's market

Consumers work with real estate professionals, lenders, home inspectors, etc., to purchase or sell a home.

Buying/selling

Engineers, contractors, and other workers build properties and infrastructure

Construction

Have a plan and stick to it

Downcycle do

Have projects ready to work on

Downcycle do

Set money aside to tide you over

Downcycle do

Break away from your sphere of influence and explore new territory.

Downcycle don't

Invest in high-end advertising to get your face out there

Downcycle don't

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

In which phase of the real estate market would you expect to see an increase in hiring and employment, increased public confidence and an increase in buyers in the market?

Explansion

Secondary mortgage market players purchase securities from investors, then package and resell them to local lenders. TF

False

Which of the following entities generally acts in the secondary market?

Fannie Mae

When does the real estate downcycle occur?

From mid November through the end of December

Which professionals are most utilized by the buyer prior to closing?

Lenders, title companies, appraisers and home inspectors

Residents enjoy local amenities and services.

Living

In the secondary market, how are mortgages grouped together and sold?

Mortgage-backed securities

Consumers make arrangements to occupy or leave the property.

Moving

The construction of what type of structures is one of the largest indicators on the country's economy

New homes

What can you expect to see during a downcycle?

No one is buying and no one is selling

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

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

Over supply

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

Over supply, Recession, Expansion and Recovery

During which phase of the real estate cycle is local government most directly involved?

Planning

Engineers, city and/or county officials map out local development

Planning

Which of these phases have an effect on the economy?

Planning, building, buying/selling, moving and living

During the _____ phase, the market begins to bottom out. We see home prices fall, while foreclosures increase

Recession

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

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

Recovery

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

During the ____ phase, things start to improve, and they continue improving until the end of the ____ phase, when the market peaks.

Recovery; Expansion

Supply is low and demand is high

Seller's Market

Both supply and demand are low

Stagnant market

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

Stay the same

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

True

Real estate activities have an impact on the economy. TF

True

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

True

The health of the overall economy may rely heavily on construction of new properties. TF

True

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. TF

True

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

Unemployment increasing, prices falling and foreclosures on the rise

Buy into a few leads services to generate business

downcycle don't

When does a seller's market occur?

when supply is low and demand is high