Principles of Real Estate Economics Quiz

Various factors such as demographics, interest rates, and economic conditions affect real estate demand.

Appraisals should be based on objective criteria, not the subjective preferences of the appraiser.

Depreciation refers to the decrease in value of a property due to wear and tear over time.

Mutual funds are financial instruments, not direct investments in real estate assets.

Real estate syndication involves multiple investors pooling their resources to invest in larger real estate projects.

Assemblage involves merging smaller land parcels to create a larger tract suitable for development.

Capitalization rate represents the rate of return expected on a real estate investment.

The law states that when demand for property increases while supply decreases, prices tend to rise.

Gentrification is the process of revitalizing urban areas, often leading to increased property values.

In a seller's market, there's high demand for properties but a limited supply, leading to higher prices.

A 1031 exchange allows for the tax-deferred exchange of like-kind properties.

Cash flow represents the net income generated from a real estate investment after deducting all expenses.

Highest and best use refers to the most financially advantageous use of a property.

Real estate prices are primarily influenced by the preferences and needs of consumers.

Land use zoning involves regulations dictating how land in specific areas can be used or developed.

The Federal Reserve influences real estate by controlling interest rates, which affect borrowing costs.

Appraisers determine the fair market value of properties based on various factors.

Feasibility studies assess whether a real estate project is financially viable before proceeding with development.