Economic characteristics of land
Economic Characteristics of Land - Answers -Scarcity, permanence of improvements,
area preferences (situs), assemblage, production
Scarcity - Answers -Supply of land is fixed and cannot be increased.
Production - Answers -The development of land + the construction of improvements
(production is slow so the real estate market is slow to change)
Area Preference (Situs) - Answers -Certain locations are more preferable and real
estate is immobile. Note that situs means location and it's the most important economic
characteristics of land.
Permanence of Improvements - Answers -The market for real estate is less flexible
because of it's permanence of improvements combined with the underlying land being
immobile. Think of how well a house has been maintained such as flooring and roofing.
These type of investments are typically long term = the market is slow to respond to
changes in supply.
Assemblage - Answers -Combining 2+ parcels of land into one single parcel of land
which is under one ownership. This typically increases the value of land. Note that any
increased value resulting from assemblage is known as plottage value.
Economic Characteristics of Land - Answers -Scarcity, permanence of improvements,
area preferences (situs), assemblage, production
Scarcity - Answers -Supply of land is fixed and cannot be increased.
Production - Answers -The development of land + the construction of improvements
(production is slow so the real estate market is slow to change)
Area Preference (Situs) - Answers -Certain locations are more preferable and real
estate is immobile. Note that situs means location and it's the most important economic
characteristics of land.
Permanence of Improvements - Answers -The market for real estate is less flexible
because of it's permanence of improvements combined with the underlying land being
immobile. Think of how well a house has been maintained such as flooring and roofing.
These type of investments are typically long term = the market is slow to respond to
changes in supply.
Assemblage - Answers -Combining 2+ parcels of land into one single parcel of land
which is under one ownership. This typically increases the value of land. Note that any
increased value resulting from assemblage is known as plottage value.
