Chapter 1 The Nature of Real Estate and Real

Transcript:Chapter 1 The Nature of Real Estate and Real:
Chapter 1 The Nature of Real Estate and Real Estate Markets Real Estate FIN 331 Spring 2020 Getting through the Course Skim read assignments prior to class Real Estate related articles frequently appear in the media and will be sent to class as supplemental readings – check your email regularly. Attendance Policy: I take attendance. More than 2 unexcused absences will result in the loss of one point for each additional absence. Getting through the Course Homework will be collected at exam time. H/W counts for 10% of our grade. Exam Issues: Please don’t kill your grandmothers. If you cannot make the scheduled exam, email me BEFORE the exam. We’ll schedule a later time. HOWEVER, the later time must be before the next class period. The Alternative is the “SOB” exam. Spare yourself the grief. No one has passed the SOB exam. Any Questions? If not…Let’s start FIN 331 Course Objectives Extend a student's basic awareness of real estate; real estate ownership, real estate value purchase and sale of varied interests in real estate real estate law and property rights fundamentals of finance as they apply to real estate values “Real estate is the single largest component of wealth in the global economy. The importance of real estate is highlighted in terms of its roles in the global and domestic economies, as well as its prominence in the investment portfolios of U.S. households.” [Ling & Archer, Real Estate 4th ed] Aggregate Market Values of Selected Asset Categories: 2011 U.S. Household Wealth: 2011 Land Use in the United States % Distribution of Land Use Chapter 1 General Concepts Types of Property Tangible: Physical assets that can be owned. It can be real or personal property. Intangible: Non-physical assets such as stocks, bonds, mortgages, leases Real Estate as a; Tangible asset: raw land, Improvements to raw land, structures Bundle of Rights: exclusive possession, use, disposition, can be unbundled As a profession Chapter 1 General Concepts Real Estate and the Economy Half of the world’s wealth Generates over 28% of U.S. gross domestic product (GDP) Housing alone accounts for almost 20% Generates nearly 70% of local government revenue (property tax) Creates jobs for nearly 9 million Americans Real Estate Values Determined by User (Space) markets: physical real estate and supply vs. demand Capital markets: RE competes for funds along with financial claims (stocks & Bonds) Impact of governmental sector on rates: raising funds