Chapter 15 Real Estate
a good balance between supply and demand for residential real estate is indicated when the vacancy rate is approximately ________.
5%
complete the statement. when the supply of available properties exceeds the demand doe those properties, it is a:
buyers market
all of the following are physical characteristics of land, except:
it depreciates
all of the following are indications of a growth period in the neighborhood life cycle, except:
"for sale" signs appear with increased frequency
all of the following are considered factors of production, except:
inventory
in which condition does market equilibrium theoretically exist?
when supply and demand are in balance
which characteristic correctly describes the real estate market?
local in nature
How does the real estate market react to shifts in consumer demand?
slowly
which of the following market factors will typically result in increased demand?
a decrease in prices
the real estate market experiences changes and cycles. what is the term used to describe the phase of the market where there is not enough demand to meet the current oversupply of available housing units?
a buyers market
which of the following best describes the free enterprise system?
a market system
in the real estate market, what is a developer considered to be?
a supplier
real estate economists look at several market conditions to predict where the market is headed. which of the following facts is considered to be a particularly valuable market indicator, known as "the barometer of the real estate market?"
availability of credit
the real estate market is cyclical in nature and tends to follow the business cycle. when at its peak, what is the typical order of the subsequent business cycle phases?
contraction, trough, and expansion
the real estate business cycle has four phases with no beginning or end. when at its peak, the subsequent phases, in order, would be _______, ________, and _________
contraction, trough, expansion
many visible "for sale" signs and an increased number of rentals may indicate the neighborhood has entered a period of ______.
decline
which of the following might be indicated if a neighborhood appears to have an abundance of "for sale" signs and an unusually high number of rentals available?
decline in the neighborhood may be indicated
all of the following indications of expansion in the market, except:
declining construction
population, credit, income, and consumer preferences are related to the _______ for real estate.
demand
which external force that affects value is indicated by the number of vacancies in an area?
economic
the four factors of production include land, labor, capital, and ______ _______.
entrepreneurial ability
which factor of production refers to the risk-taking and management component of production?
entrepreneurial ability
what is the correct order of the business cycle phases?
expansion, peak, contraction, and trough
the social, economic, governmental, and environmental forces that affect real estate values are referred to as ____________.
externalities
what term refers to the phenomenon that occurs in older neighborhoods where younger, single people and small families begin purchasing properties and rehabilitate or renovate them to live in proximity to urban services?
gentrification
which of the following terms is used to describe the relatively new phenomenon in which small families move into older neighborhoods, renovate the properties, and displace poorer residents?
gentrification
all of the following conditions would typically exist in a free enterprise system, except:
government is in control of the products and services produced
what term refers to the legal use that generates the most return on the land (and any improvements) when compared to alternative uses?
highest and best use
the use that creates the highest value to the land is its ______ and ______ use.
highest, best
price and demand are inversely related. this means that demand will typically decrease as prices _______ and as prices, decrease demand will typically _________.
increase, increase
physically, real estate is characterized as being _______, ________, and ________.
indestructible, immobile, heterogenous
the real estate market can be best described as being ______ and _______.
inefficient, unorganized
what is the correct order in which the criteria for estimating highest and best use should be considered?
legally permissible, physically possible, economically feasible, and maximally productive
what is the correct sequential order of the four criteria applied to determine highest and best use of a parcel of real estate?
legally permissible, physically possible, finically feasible, and maximally productive
if two or more parcels have a greater value as a single tract than the sum of their individual values as separate sites, their combination results in _______ value.
plottage
it has been determined that the value of three lots, each having a value of $10,000 each, is $50,000 as a single tract parcel. which concept does this illustrate?
plottage
an investor purchases a lot with an abandoned house for $100,000, along with an adjacent vacant lot for $115,000. the investor demolishes the house, the sells the two lots together for $250,000. what would the additional value be called?
plottage value
what term is used for the increases value of two or more parcels of land that are combined as an assemblage?
plottage value
when estimating supply, it is not necessary to consider which of the following?
price
a ________ market exists when there is an excess of demand over supply.
sellers
what type of market exists when there are more buyers than sellers?
sellers market
immigration and emigration into and out of a neighborhood are an influence on value that can be categorized as a ________ force.
social
an economic term used to identify value which results from the location of a parcel of land is _______.
situs
which of the following terms relates specifically to the location of a property?
situs
what is the term used for the value that results from the location of a parcel of land within a community?
situs value
the real estate market is ______ to respond to changes in supply or demand.
slow
in the real estate market the seller of a $500,000 home is not in competition with the seller of a $100,000 home. which term refers to the creation of different levels of competition in the market based on price?
stratified demand
the availability of materials, labor, financing, and land are all associated with the _______ of real estate.
supply
which term refers to the quantity of an item that is available?
supply
which of the following statements is true regarding the real estate market?
the real estate market is local in nature
all of the following statements apply to the real estate market, except:
the real estate market is national in nature
two factos that affect a real estate market are supply and demand. which of the following would be a good indicator of the measure supply versus demand?
the vacancy rate within the community
all of the following are conditions in an efficient market, except:
there are governmental regulations that limit production