Real Estate i
Real Estate Industry in the Rental Market
Abstract
“Real estate is land, all of the natural parts of land such as trees and water, and all permanently attached improvements such as fences and buildings. People use real estate for a wide variety of purposes, including retailing, offices, manufacturing, housing, ranching, farming, recreation, worship, and entertainment.” (Answers.com) In order to more specifically focus on a specific area of real estate this discussion will deal with the housing industry of real estate. In this discussion, when housing is analyzed it will be in the realm of rental real estate.
Real Estate 1
Uses of Land
Like with any other commodity or resource the market for rental property is affected by supply and demand. “When we break the market for land into markets for uses of land, then the supplies are not fixed, and prices and profits function as they do in any other market.” (Microeconomics 396) When analyzing the housing bubble it is important to understand that the rental real estate market is not necessarily affected in a negative way. “The term bubble means that the price of an asset is being bid up through speculation or gambling rather than because of the value of the services the asset returns.” (Microeconomics 396) Often times the housing bubble deals with speculative real estate which is in a fluctuating market. For example, housing which is located close to resort areas will change value dramatically with the change of the affects o ...