Real Estate Industry In The Rental Market

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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.

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 of the bubble. One of the constant factors of the real estate market becomes the average price rental market which may actually see an increase in demand when higher priced real estate becomes unattainable. ...

... middle of paper ...

...te value is rental real estate. When other factors contribute to home ownership frustration such as increased taxes, utility expenses, insurance expenses, and the sudden need for home repair the one constant resource is the rental property which usually can be absorbed by the investor who holds these properties.

References

Real Estate Industry. (n.d.). Encyclopedia of American History. Retrieved April 20, 2008, from Answers.com Web site: http://www.answers.com/topic/real-estate-industry

Boyes, Williams & Melvin, Michael “Microeconomics” Seventh Edition, Houghton Mifflin Boston (2008)

Melville, Sandra Real Estate Costs and Responsibilities Retrieved April 20, 2008 from Downtownsandiegoproperties.com (2006) Web site: http://www.downtownsandiegoproperties.com/real_estate_costs.htm

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