California RE Economics FINAL

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California Real Estate Economics: 

California Real Estate Economics 3rd Edition Ignacio Gonzalez, Consulting Editor

Introduction to Economic Systems and Principles: 

Introduction to Economic Systems and Principles Chapter 1

What Is an Economic System?: 

What Is an Economic System? Operation Wealth Adding Value Goods and Services Needs and Desires Biological Needs Socially-Defined Needs Socially-Defined Desires

A Brief History of Economic Systems : 

A Brief History of Economic Systems Hunter-Gatherer Economies Agriculture Trade and Conquest Feudalism The Rise of the Merchant Class Exploration and Colonialism Adam Smith

Revolutions : 

Revolutions The Industrial Revolution Political Revolutions Karl Marx

Roots of the Modern U.S. Economy : 

Roots of the Modern U.S. Economy The New Nation Divergent Philosophies Expansionism Industrialization Labor Movements The Great Depression and the New Deal

Modern Economists: 

Modern Economists John Maynard Keynes Milton Friedman

Capitalism and Socialism: Theory and Practice: 

Capitalism and Socialism: Theory and Practice Capitalism Socialism Mixed Economies

The U.S. Economy Today: 

The U.S. Economy Today Snapshot Employment Productivity

Supply and Demand: 

Supply and Demand Chapter 2

Supply and Demand in the Real Estate Market : 

Supply and Demand in the Real Estate Market Uniqueness Immobility

Value : 

Value Money Interest Rates Inflation

Supply Factors: 

Supply Factors Labor Force and Construction Costs Government Controls and Financial Policies

Measuring Supply: 

Measuring Supply Supply Curve

Demand Factors: 

Demand Factors Population Demographics Employment and Wage Levels Measuring Demand Demand Curve Changes in Income

Equilibrium: 

Equilibrium The primary objective in any market-driven economy is to reach the stage at which supply and demand are in balance.

Local Economic Strength: 

Local Economic Strength Net Exports Diversity Supporting Facilities (Infrastructure) Diversion of Local Capital to Other Areas (Investment Mobility) Taxes

Elasticity: 

Elasticity Interrelationship between demand and price Responsiveness of supply or demand to price

Economic Change Analysis: 

Economic Change Analysis Chapter 3

The Inevitability of Change : 

The Inevitability of Change Trends Fluctuations Periodic Fluctuations Irregular Fluctuations Random Fluctuations Cyclical Fluctuations

Business Cycles: 

Business Cycles Peak Upper Turning Point Contraction Trough Lower Turning Point Expansion Duration Amplitude

Economic Conditions: 

Economic Conditions Recession Depression Recovery Prosperity Boom

What Do Business Cycles Mean? : 

What Do Business Cycles Mean? A business cycle is characterized by general, simultaneous expansion or contraction in a number of different economic activities. Cycles can be recurring. Cycles are not periodic. Their length and duration cannot be predicted.

Early Warning Indicators: 

Early Warning Indicators Employment and Inflation Population Shifts Saving vs. Spending Repair vs. Replace

Economic Forecasting : 

Economic Forecasting The Nature of Forecasting Prediction vs. Forecast Implicit vs. Explicit Forecasting Uses of Forecasting Budget Preparation Business Cycle Crisis Management Agricultural Controls and Price Supports Defense Spending

Approaches to Forecasting : 

Approaches to Forecasting Data Collection Types of Indicators Coincident Lagging Leading

Uses of Leading Indicators : 

Uses of Leading Indicators Major Leading Indicators Federal Publications and Websites State Publications and Websites News Media Diffusion Indices

Major Economic Indicators : 

Major Economic Indicators Consumer Price Index (CPI) Calculation of CPI Interpretation Local CPI

Gross Domestic Product (GDP) : 

Gross Domestic Product (GDP) Individual Consumption Spending Durable Goods Nondurable Goods Services Investment Spending Nonresidential Investments Residential Investments Business Inventories Government Spending Net Exports Using GDP

Unemployment Rate : 

Unemployment Rate Data Limitations

The Stock Market as Indicator: 

The Stock Market as Indicator Limitations

Money and Monetary Policy: 

Money and Monetary Policy Chapter 4

The Evolution of Money: Money Through History: 

The Evolution of Money: Money Through History Early Barter Economies Primitive Money Early Civilizations Development of Coinage Medieval to Early Modern Era Paper Money Goldsmith’s Notes 18th and 19th Centuries Central Banks Paper Money Debate in America Forms of Modern Money

U.S. Monetary Policy & the Federal Reserve System : 

U.S. Monetary Policy & the Federal Reserve System Short-Term Goals History of the Federal Reserve System (Fed) Structure of the Fed

The Fed’s Duties: 

The Fed’s Duties Conducting the Nation’s Monetary Policy Supervising/Regulating Banking Industry Maintaining Stability of Financial System Providing Financial Services

Monetary Policy and the Money Supply : 

Monetary Policy and the Money Supply Tools of Monetary Policy Measures of Supply M1 M2 M3 L Money Supply and Banks Circulation of Deposit Money

Inflation: 

Inflation Causes of Inflation Demand Supply Labor Agriculture Quotas COLAs Measuring Inflation

Impact of Monetary Policy on Real Estate : 

Impact of Monetary Policy on Real Estate Monetary Policy Fiscal Policy State and Local Governments

The Real Estate Market: 

The Real Estate Market Chapter 5

The Nature of Real Property : 

The Nature of Real Property Land Durability Limited Supply Cost Factors Heterogeneity Emotional Attachment Political Implications

Characteristics of the Real Estate Market : 

Characteristics of the Real Estate Market Components of the Market Place Complexity Compartmentalization Functions of Components Advertise Inform Appraise Negotiate Arrange Financing Transfer Respond to Consumer Demand Manage Risks Interface Market Familiarity

Evolving Issues : 

Evolving Issues New Laws Consumer Protection Tax Laws Fair Housing Americans with Disabilities Act (ADA) Ethnic Mix Architectural Fashions

The U.S. Housing Market: 

The U.S. Housing Market Chapter 6

Residential Construction : 

Residential Construction Expenditures on Maintenance and Alteration Evolution of Housing in the U.S. The Contractor System Architectural Styles Housing Definitions U.S. Home Ownership

Housing Unit Size: 

Housing Unit Size Housing Unit Single Family Multi-Unit Buildings, 2- to 4-Units Multi-Unit Buildings, 5 or More Units

Unit Size: 

Unit Size Rooms per Dwelling Number of Bedrooms Square Footage

Modes of Construction: 

Modes of Construction On-Site Construction Industrialized Housing Modular Construction Panelized Construction Manufactured Homes

Who Owns America’s Housing Stock?: 

Who Owns America’s Housing Stock? Households

Characteristics of the Market: 

Characteristics of the Market Housing: A Unique Product Value in Context Business Climate Infrastructure Amenities Public Sector Specialized Service Neighborhoods Subjectivity Recent History of House Prices

Characteristics of the Market: 

Characteristics of the Market Housing Starts Housing Start Cycle Local Business Conditions Population Growth Real Estate Development Employment Opportunities Retail Sales Interest Rates

California’s Economic Profile : 

California’s Economic Profile Chapter 7

At Home in California : 

At Home in California California’s Diversity Demographics

Level of Economic Activity in California: 

Level of Economic Activity in California Professional Workforce Educational Institutions Hospitality to New Ideas

Employment in California : 

Employment in California Major Categories of Employment The Service Sector Manufacturing Employment Federal Government as Buyer

Income: 

Income Sources of Personal Income

Agriculture: 

Agriculture Food Processing California’s Major Agricultural Producers

Foreign Trade: 

Foreign Trade Technology Electronic Products Industrial Machinery Transportation Equipment Agriculture Trade Balance

California’s Micro-Economies : 

California’s Micro-Economies Demographics Population Employment Per Capita Income

The California Real Estate Market: 

The California Real Estate Market Chapter 8

Building a Market: 

Building a Market An Economic Roller Coaster Housing Patterns Occupancy Types of Housing Units

Vacancy Rates: 

Vacancy Rates Geographic Factors Economic Fluctuations

Characteristics of Households : 

Characteristics of Households Age Household Size

Income and Affordability : 

Income and Affordability Payment to Income Ratios

Housing Indicators: 

Housing Indicators Sales of Existing Homes Housing Starts California Housing Starts U.S. Total Housing Starts

Rental Housing : 

Rental Housing Disadvantages of Renting

Commercial and Industrial Trends : 

Commercial and Industrial Trends Availability Building Types Architectural Styles and Tastes Aging of Inventory Environmental Concerns Asbestos Lead Underground Storage Tanks Mold

Components of the Market : 

Components of the Market Commercial Structures

The Retail Market : 

The Retail Market Convenience Centers Neighborhood Centers Community Shopping Centers Regional Shopping Centers Shopping Malls Availability

Office Space : 

Office Space Vacancy Rates The U.S. as a Whole Northern California Southern California Building Types Building Age

The Industrial Market : 

The Industrial Market Vacancy Rates

California’s Rural Real Estate Market : 

California’s Rural Real Estate Market The Land Arable Soil Extended Growing Season Water Supply Grazing Land Inhibitors to Agricultural Development

Lumbering and Mining : 

Lumbering and Mining Scarcity Government Control Supply Difficult Access Transportation Demand Tax Treatment Mining Quality of Resource Economic Conditions Environmental Concerns

Open Space Protection : 

Open Space Protection Farmland Protections The Williamson Act The Role of the State of California The Role of the Individual Counties Natural and Recreational Land

Land Use Planning and Development: 

Land Use Planning and Development Chapter 9

Steps in the Development Process: An Overview : 

Steps in the Development Process: An Overview Site Acquisition Feasibility Study Sales Contract Option Agreement Lease with Option to Purchase Escrow Instructions with Contingencies Other Conditions of Due Diligence Interim Activities

Project Financing and Scheduling : 

Project Financing and Scheduling Lender’s Investigation Restrictions Easements Contacts Liens Other Conditions Construction Scheduling Permanent Financing

Government Regulation of Land Use : 

Government Regulation of Land Use Zoning Objectives Bulk Zoning Aesthetic Zoning Incentive Zoning Inclusionary Zoning/Affordable Housing Requirements

The Comprehensive Land-Use Plan/General Plan : 

The Comprehensive Land-Use Plan/General Plan Land Use Housing Needs Movement of People and Goods Community Facilities and Utilities Energy Conservation Safety

Governmental Issues: 

Governmental Issues Constitutional Issues and Zoning Ordinances Taking Eminent Domain The Kelo Decision and its Implication on Land Use Planning Nonconforming Use Variances and Conditional-Use Permits Building Codes

Regulation of Land Development : 

Regulation of Land Development Land Development Plan Plats Subdivision Plans Subdivision Density Street Patterns Clustering for Open Space Private Land Use Controls

Regulation of Land Sales: 

Regulation of Land Sales Interstate Land Sales Full Disclosure Act Exemptions California Subdivided Land Sales Economic Cooperation Establishing Rapport Willingness to Compromise Infrastructure Participation in the Planning Process Understanding Community Goals Cooperation between Public and Private Sectors Benefits to Community

Fair Housing and Environmental Regulations : 

Fair Housing and Environmental Regulations Chapter 10

Fair Housing Laws: 

Fair Housing Laws The Evolution of Equal Housing Opportunity Fair Housing Act Disability Exemptions Equal Credit Opportunity Act Americans with Disabilities Act Fair Housing Advertising Practices California Fair Housing Laws Accessibility Burrows v. Jackson The Rumford Act California Civil Rights Act

Environmental Issues : 

Environmental Issues Hazardous Substances Asbestos Lead Radon Urea-Formaldehyde Carbon Monoxide Electromagnetic Fields Mold Groundwater Contamination Underground Storage Tanks (USTs) Waste Disposal Sites CERCLA and Environmental Protection California Environmental Regulation The California Environmental Quality Act (CEQA) Environmental Impact Reports (EIRs)

Financing and Taxation: 

Financing and Taxation Chapter 11

Introduction to Real Estate Finance: 

Introduction to Real Estate Finance Availability of Funds Allocation Yield Safety Liquidity Investor Expectations The Federal Reserve System Reserve Requirements Discount Rates The Primary Mortgage Market

Participants in the Primary Mortgage Market: 

Participants in the Primary Mortgage Market Thrifts, Savings Associations, and Commercial Banks Insurance Companies Credit Unions Pension Funds Endowment Funds Investment Group Financing Mortgage Banking Companies Mortgage Brokers

The Secondary Market : 

The Secondary Market Fannie Mae Government National Mortgage Association Federal Home Loan Mortgage Corporation

Financing Techniques: 

Financing Techniques Straight Loans Amortized Loans Adjustable-Rate Mortgages (ARMs) Balloon Loan Growing-Equity Mortgage (GEM) Reverse-Annuity Mortgage (RAM)

Loan Programs : 

Loan Programs Determining LTV Conventional Loans Private Mortgage Insurance (PMI) FHA-Insured Loans Prepayment and Assumption Discount Points VA-Guaranteed Loans Prepayment and Assumption Cal-Vet Farm Service Agency

Creative Financing Techniques : 

Creative Financing Techniques Purchase-Money Mortgages Package Loans Blanket Loans Wraparound Loans (AITDs) Open-End Loans Construction Loans Sale-and-Leaseback Loan Buy-Downs Home Equity Loans Lines of Credit

Financing Legislation : 

Financing Legislation Truth-in-Lending Act and Regulation Z Creditor 3-Day Right of Rescission Advertising Penalties Equal Credit Opportunity Act Community Reinvestment Act Real Estate Settlement Procedures Act Computerized Loan Origination (CLO) Automated Underwriting

Taxation: 

Taxation Types of Taxes Progressive Taxes Proportional Tax Regressive Tax User Fees and Other Charges Ad Valorem Property Taxation Proposition 13 Inequalities in Real Property Taxation Reassessment Procedure Effect on Tax Structure Reallocation of Resources Poverty Level Working Poor Middle Class Upper Class

The Economics of Real Estate Investment: 

The Economics of Real Estate Investment Chapter 12

Investing in Real Estate : 

Investing in Real Estate Advantages of Real Estate Investment Disadvantages of Real Estate Investment The Investment Appreciation Unimproved Land Income Property Cash Flow Investment Opportunities Leverage Equity Build-Up Pyramiding

Tax Benefits : 

Tax Benefits Exchanges Depreciation Deductions Installment Sales

Investing with Others : 

Investing with Others Real Estate Investment Syndicate Forms of Syndicates Real Estate Investment Trusts Real Estate Mortgage Investment Conduits

The Economics of Appraisal: 

The Economics of Appraisal Chapter 13

The Evolution of Property Valuation : 

The Evolution of Property Valuation The Need for Appraisal

The Appraisal Industry : 

The Appraisal Industry Regulation of Appraisal Activities Changes in the Appraisal Industry Educational Requirements

Essential Elements of Value : 

Essential Elements of Value Value Demand Utility Scarcity Transferability Market Value Market Value and Market Price Market Value and Cost

Basic Principles of Value: 

Basic Principles of Value Anticipation Change Competition Conformity Contribution Highest and Best Use Increasing and Diminishing Returns Plottage Regression and Progression Substitution Supply and Demand

Approaches to Value: The Sales Comparison Approach : 

Approaches to Value: The Sales Comparison Approach Property Rights Financing Concessions Conditions of Sale Date of Sale Location Physical Features and Amenities

Approaches to Value: The Cost Approach : 

Approaches to Value: The Cost Approach Determining Reproduction or Replacement Cost New Square-Foot Method Unit-in-Place Method Quantity-Survey Method Index Method Depreciation Physical Deterioration Functional Obsolescence External Obsolescence Straight-Line Depreciation

Approaches to Value: The Income Approach : 

Approaches to Value: The Income Approach Gross Rent of Gross Income Multipliers Reconciliation

The Appraisal Process : 

The Appraisal Process The Appraisal Report Unacceptable Appraisal Practices

Analyzing Residential Income Property: 

Analyzing Residential Income Property Chapter 14

Analyzing Residential Income Property: 

Analyzing Residential Income Property A Process Approach

Step One: Clarifying the Issue : 

Step One: Clarifying the Issue Location Financial Goals Tax Considerations Structuring of Ownership Development Considerations

Step Two: Collecting the Data: 

Step Two: Collecting the Data Current Economic Data Traditional Sources Local Government Other Local Sources Market Surveys Research Design

Step Three: Interpreting the Data : 

Step Three: Interpreting the Data Project Description Improvements Prices Amenities Lot Size, Unit, and Room Size Area Description Economic Trends Infrastructure, Transportation, and Services Shopping Schools and Houses of Worship Other Community Amenities Competition Cost Analysis

Step Four: Making the Decision : 

Step Four: Making the Decision Conclusions Strategies Assessment and Follow-Up

Measures of Investment Performance : 

Measures of Investment Performance Direct Capitalization Cash-on-Cash Return Band of Investment Analysis Pay-Back Period Proceeds per Dollar Invested Discounted Cash Flows Net Present Value Interpretation Internal Rate of Return Calculation Application

Analyzing Commercial Investment Property: 

Analyzing Commercial Investment Property Chapter 15

Fundamental Principles: 

Fundamental Principles Clarifying the Issue Collecting the Data Interpreting the Data Making the Decision

Types of Property : 

Types of Property Office Property General Purpose Special Purpose Community of Interest Facilities Parasite Structures Retail Property Mini-Mall Neighborhood Shopping Center Community Shopping Center Regional and Super Regional Centers Big Box Power Centers Industrial Property Incubator Buildings Industrial Parks Office Parks Special Purpose Properties Other Specialized Uses

Commercial Property Investment: An Analytical Approach: 

Commercial Property Investment: An Analytical Approach Economic Base of the Area Infrastructure Availability Attitude of Government NIMBY Environmental Matters Competitive Factors

Trends for the 21st Century : 

Trends for the 21st Century Population Land Supply Transportation Employment Summary: How has California Grown?