real estate finance - full book (500 pgs)

Expensive real estate particularly improved real

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Unformatted text preview: y and encourage spending. No simple solutions – During a period of stagflation, as the economy is pulled in opposite directions, the task of regulating government spending and taxation becomes exceedingly difficult. CHARACTERISTICS OF REAL ESTATE Local – Each parcel of real estate is unique. In this sense, then, so is each real estate loan, as most lenders lend in their own local geographic areas, and each risk must be individually evaluated. Complex – Each parcel of real estate, especially an improved parcel, is composed of many legal rights and interests. Any mortgage secured by this real estate becomes involved in these complexities. Durable – Real estate is virtually indestructible, and can be financed over a long period of time. The decision to purchase real property is generally not only a long–term commitment for the buyer, but is also a long–term commitment for the lender. Expensive – Real estate, particularly improved real estate, is expensive because of its unique, durable, and complex nature and, therefore, requires a relatively large amount of mortgage money to purchase. Dynasty School (www.dynastySchool.com) 2-13 REAL ESTATE FINANCE THE CALIFORNIA MORTGAGE MARKET There are several characteristics of real estate which set it apart from other investments, and are reflected in the mortgage market. These characteristics are all subject to local and regional variation, and California manifests them in unique ways. WARMER, MILDER CLIMATE High demand – California has a large population with a fast growth rate and high demand. California is the most populous state, continues to attract new residents, and has a high birth rate. State officials expect California's population to rise from approximately 33 million in the year 2002 to 60 million by 2040! WIDE DIVERSIFICATION OF INDUSTRY AND AGRICULTURE Diversity – California's economy is one of the most diversified worldwide and is growing with a mix of ethnic and social diversity that is creating new opportunities for housing and financing....
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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