Real estate pricing
Encyclopedia
Real estate pricing deals with the valuation
of real estate
and all the standard methods of determining the price
of fixed asset
s apply.
The median
home price is one of the most common measurements used to compare real estate prices in different markets, areas, and periods. It is said to be less biased than the mean
(average) price since it is not as heavily influenced by small number of very highly priced homes.
Rents and prices are often expressed per square foot or square metre to act as a basis of comparison.
Home prices are limited by various factors, such as the incomes of potential buyers, the cost and ability to construct new property to increase supply, and demand for rental units. Since eighty percent of all homes purchased are purchased with a mortgage, the ability to make payments, borrow money, and the cost of borrowing money are major influences limiting how far prices can rise before hitting resistance due to prices hitting levels where potential buyers are unable to qualify. In general the ratio in the US are home values at 2-4 times annual income levels.
Valuation
-Economics:*Valuation , the determination of the economic value of an asset or liability**Real estate appraisal, sometimes called property valuation , the appraisal of land or buildings...
of real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
and all the standard methods of determining the price
Price
-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...
of fixed asset
Fixed asset
Fixed assets, also known as a non-current asset or as property, plant, and equipment , is a term used in accounting for assets and property which cannot easily be converted into cash. This can be compared with current assets such as cash or bank accounts, which are described as liquid assets...
s apply.
Median
In probability theory and statistics, a median is described as the numerical value separating the higher half of a sample, a population, or a probability distribution, from the lower half. The median of a finite list of numbers can be found by arranging all the observations from lowest value to...
home price is one of the most common measurements used to compare real estate prices in different markets, areas, and periods. It is said to be less biased than the mean
Mean
In statistics, mean has two related meanings:* the arithmetic mean .* the expected value of a random variable, which is also called the population mean....
(average) price since it is not as heavily influenced by small number of very highly priced homes.
Rents and prices are often expressed per square foot or square metre to act as a basis of comparison.
Home prices are limited by various factors, such as the incomes of potential buyers, the cost and ability to construct new property to increase supply, and demand for rental units. Since eighty percent of all homes purchased are purchased with a mortgage, the ability to make payments, borrow money, and the cost of borrowing money are major influences limiting how far prices can rise before hitting resistance due to prices hitting levels where potential buyers are unable to qualify. In general the ratio in the US are home values at 2-4 times annual income levels.
See also
- United States housing bubbleUnited States housing bubbleThe United States housing bubble is an economic bubble affecting many parts of the United States housing market in over half of American states. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and may not yet have hit bottom as of 2011. On December 30, 2008 the...
- List of real estate topics
- National Association of RealtorsNational Association of RealtorsThe National Association of Realtors , whose members are known as Realtors, is North America's largest trade association. representing over 1.2 million members , including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries...
- Real estate appraisalReal estate appraisalReal estate appraisal, property valuation or land valuation is the process of valuing real property. The value usually sought is the property's Market Value. Appraisals are needed because compared to, say, corporate stock, real estate transactions occur very infrequently...
- Real estate economicsReal estate economicsReal estate economics is the application of economic techniques to real estate markets. It tries to describe, explain, and predict patterns of prices, supply, and demand...
- Real propertyReal propertyIn English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
- Investment Rating for Real EstateInvestment Rating for Real EstateAn investment rating of a real estate property measures the property’s risk-adjusted returns, relative to a completely risk-free asset. Mathematically, a property’s investment rating is the return a risk-free asset would have to yield to be termed as good an investment as the property whose rating...
- Online auction business modelOnline auction business modelThe online auction business model is one in which participants bid for products and services over the Internet. The functionality of buying and selling in an auction format is made possible through auction software which regulates the various processes involved.Several types of online auctions are...