RealEstateLectures

RealEstateLectures - Lecture: September 9,2009 Why would...

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Lecture: September 9,2009 Why would the bank give you a big mortgage on real estate? Real Estate will always be there. They have security. High Transaction Cost: There is a cost to do any type of transaction in RE. It makes it less liquid. Whether it’s buying, selling, or titling, there is a cost. The value of your real estate depends on what is around your land. ( Schools, Parks, Ocean etc ) Another difference between RE and any other Asset is all RE is different. Heterogeneous Products. Very tough to get market value—although bad, the people who do their HW and localize better will come up on top. Unlike stocks, RE is not transacted frequently. Marginal Principle: is essential in Economics. If marginal benefit > marginal cost, do more. You produce to the point where benefit = cost. * Products Market- Substitution Effect: Price of substitutes will affect the demand for the product. Income Effect:
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RealEstateLectures - Lecture: September 9,2009 Why would...

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