REAL ESTATE MARKETS

Real Estate economics is the application of economic techniques to real estate markets. It describes and explains real estate prices, building production, and real estate consumption. One of the closest fields in housing economics is the real estate market. Both drawing on partial equilibrium analysis, urban economics, spatial economics, and finance.
The main participants in real estate markets are:

• Owner/User - These people are both owners and tenants. They purchase houses as an investment and also to live in or utilize as a business.
• Owner - These people are pure investors. They do not consume the real estate that they purchase. Typically they rent out or lease the property to someone else.
• Renter - These people are pure consumers. Developers - These people prepare raw land for building which results in new product for the market.
• Renovators - These people supply refurbished buildings to the market.
• Facilitators - This includes banks, real estate brokers, lawyers, and others that facilitate the purchase and sale of real estate.

The owner/user, owner, and renter comprise the demand of the market while the developers and renovators comprise the supply. In order to apply simple supply and demand analysis to real estate markets a number of modifications need to be made to standard microeconomic assumptions and procedures. In particular, the unique characteristics of the real estate market must be accommodated and these include durabilty, heterogeneous, high transaction costs, long time delays, and immobility.

The best and worst in real estate would be considered in some regions. Areas in the northeast like Long Island were among the first in the region to see the effects of the slowdown. The region still has a ways to go before finding solid ground. In the opposite end, the south housing market look healthy for the region, which may boast 12 of the 20 hottest markets for 2007. In the Midwest, it comes out that there was a steady market and the region missed out on much of the boom but at least it won’t suffer the aftermath. None of the midwestern cities in the forecast are projected to fall. Lastly, the west was chilled on the coast. During the boom, speculators headed westward to find gold in bricks and shingles. Now they’re heading for the exits. The region will probably be home to the nation’s five coldest markets for 2007.