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Real estate characteristics.

Real estate is important because everybody needs to be located somewhere, and almost everybody wants shelter. Real estate is complex because it is a large purchase, and land involves sovereign jurisdiction along with private possession and income. Real estate is land and the capital goods attached to a site. Land: three dimensional space and the natural material resources in that space. Property is anything that can be controlled by human beings. Ownership is a bundle of rights. The legal term for ownership is title. IG2: real estate properties are unique, no two are identical. R.e. is immobile. Thus, local markets. Slow adjustment to shifts in supply and demand, development taking a long time and having a great expense, and real estate being durable. Property rights and legal descriptions Real property is real estate. All other property is personal property. Personal property is also called chattel. The law regarding real property is much more complex than for personal property. The document that records and proves title to real property is called a deed. The deed has to identify the property boundaries, the bundle of rights held by the title, and the owners. Personal property that becomes attached to a site is called a fixture,except for property used in a trade or business, trade fixtures. Fixtures include things such as landscaping, water heaters, and drapes. Some fixtures such as a chandelier can be designated as personal property in the sales contract. If a contract does not specify whether an item is a fixture, then there are two criterion that apply. The test of attachment is that the removal of the fixture would cause damage. For example, built-in appliances. The second is the test of adaptability, items which have been specifically adapted to other fixtures. The bundle of rights to real estate include air rights, mineral rights, and water rights, but these bundles may be held separately from others. Riparian rights are about rights to bodies of water. The owner of real estate by the ocean usually owns the space up to the high-water mark. Owners of property next to fresh water can have the right to use the water. Under riparian rights, all owners of sites next to or including water have equal rights to use the water, as long as the use does not deprive others. If the owner has prior appropriation rights, then it's first come, first served. The first person to use the water has the legal right to use all he wants, but subject to regulations. Ownership of real estate is called estates in land. A leasehold provides the lessee with the right to possess real estate, subject to paying a rental to the lessor. The landlord has a leased fee estate. If a tenant no longer has leasehold but continues to have possession, he has a tenancy at sufferance. A freehold estate provides the title holder with rights of possession and the income or rental from land. A life estate is a freehold estate that terminates upon the death of a named person. A fee simple absolute estate provides the greatest amount of rights to real estate. These rights are alienable, meaning the owner may transfer the property. Inalienable rights are those which you may not dispossess yourself of. When 2 or more persons own the same real property, they have concurrent estates. They are tenants in common when each owner has an undivided interest. Each owner may dispose of his share. In joint tenancy, each owner has the same percentage interest. The others have the right of survivorship, automatically inheriting the property. California and some other states have community property titles, a type of ownership that came from the Spanish.

marriage and divorce rates. drawings of parcels. Determine the median home price for the area. Often. A member has a proprietary lease. The association owns the common elements as a corporation. Each member has a fee simple title to a unit. population growth. The residents have a leasehold on their plots of land. income after taxes. There is also land owned by a government. The area is divided into north-south range lands. such as open space. . the members own stock in a nonprofit corporation. a leasehold interest for a particlar time interval. they rent their units or swap with others. and east-west base lines. This is based on principal meridians or longitude lines. The member is an owner of the condominium association. existing home sales http://www.xls 1. www. civic goods. owned as a tenant in common. There can also be a right-to-use time share. plots of land are described by a combination of a rectangular survey and metes and bounds. The member pay assessments to the association. by the National Association of Realtors. the right to occupy a particular unit for an indefinite period of time. ethnic and racial and pays a monthly assessment. like a military base. The description often uses iron pins which are put in the The member has a contract with all the other co-owners.000. In a cooperative. the members have a fee simple ownership of their units such as a single-family house and research. Possibly a tenant resident also has a vote. with an area of six-mile squares.nsf/files/Rel05Q4F. inflation. A member's vote is proportional to his percentage interest. Owners have a fee interest time share. usually by the week. Metes are the distances. Demography: structure of the population: males and females. An interval ownership or time share is a concurrent estate that divides ownership by time. and a percentage interest in the common elements. The term "township" also is used for governmental jurisdictions in eastern states. interest rates. California uses the rectangular survey system. with the lots numbered. preferences. Government land can be a commons. A land trust is like a corporation. A square mile has 640 acres. and vote for the members of the board. and east-west township lines. say $400. 36 sections each one square mile. Property acquired prior to the marriage or by inheritance is not automatically part of community property. In a residential association or homeowners' association. or excludable. and streets. The members pay a periodic fee. with a fee-simple title for a particular week. having title to land. called Housing Markets Demand for housing a function of: population density. New members require the approval of the board of directors. Deeds require a legal description of the location and extent of the land. ages. Real estate in a marital community can only be sold with the permission of both spouses. They pay rent to the trust in exchange for using the land and obtaining services from the trust. meeting places.The husband and wife jointly own the property acquired during the marriage. where anybody may enter with no charge. The lines form squares. which do not use the rectangular system. Housing affordability index. and bounds are the directions of the boundaries.xls/$FILE/Rel05Q4F. A condominium consists of individual units and common elements. Properties can also be described by plats. The board is elected with each member having one vote. but own their buildings. In urban communities.

Median income: say $60. Includes both land rent and the rental of buildings and other improvements. 1991. 3.25: $108.600. 9. 98% or more of the quantity demanded is from existing houses. land rent is $1. Steven Cord. Calculate the loan payment: $400. Select the nominal mortgage interest rate.5% of national income! Why so low? Excludes rent in land owned by corporations. The trend has been to larger houses. Excludes rent on government land. some houses last for hundreds of years. add: 25. Select the median household income. then divide by . such as 6% fixed rate. we get about a trillion dollars of rental income. Insurance.5 trillion. In boom years. If we add about a trillion dollars of capital gains. In Europe.000 8. Add corporate rent and government rent. The law of rent: The rent of a plot of land equals the difference between its output and the output at the least productive land in use.9 * . If we include these. depreciation. it was recorded as .25% of GDP Explicit rent from tenants plus imputed rent from owner-occupied housing. economic rent of US land is 20% of national income.000 = 4000.2. In 1987. 1. Property tax: . only of natural persons.400 27. Excludes real estate taxes.000 = 55%.01*400. 5.000 * . say $1. Select the usual down payment: say 10 percent. In 1929.5 trillion.5 trillion Rental income of persons: $132 billion. 4. How much is rent? GDP accounts: GDP $10.000 10. and we get about $2. . If housing is25% of income. The supply of residential housing. Excludes capital gains.06 = $21.600 7. mortgages (amortization and interest). "Rental income of persons" is what is left after deducting taxes. Ratio: 60.000 income needed. Half of this is land rent. 6.000 / 107. 4th quarter 2002. new construction adds 2 percent to the stock. Tax credits: Boston Financial Qualified Housing Tax Credits Boston Capital Tax Credit Fund The law of wages: The wage level for an economy is set by the wage at the margin of production. the national income accounts put rent at 6% of national income.

The rental pays the interest. land at $3. and reduced on capital gains such as at 20%. So rent goes to interest. interest. Their net income is zero. reports annual losses. real estate industry is $800 billion per year. Prof.S. forestry. . Michael Hudson estimates US land value at $9 trillion. Most commercial real estate in the U. Mason Gaffney's studies conclude that land value is at least half of real estate value. Bureau of Economic Analysis put real estate in 1988 at $10 trillion. That income is counted as profit.7 trillion. Does not include rent on oil.Michael Hudson. Taxes are therefore zero on rental income.S. It is counted as interest. ranching. And $225 billion paid in local real estate taxes. gas. electromagnetic spectrum. A study by Michael Hudson and Richard Noyes in 1997: rental income for the U. That is 2/3 of the economy's total assets of $20 trillion. There is also $300 billion in mortgage interest. money market funds. and taxes eat up the rental revenue.4 trillion in 1994. puts rent at 25%. taxes. Capital consumption. but it is really rent. 14% of national income. farming. Data published by the Federal Reserve Board in 1991 put U. profits. Most savings in the US is recycled by the banking and insurance systems into mortgage lending. fishing. 1997. and they hope for capital gains. Real estate investors and speculators often try to borrow as much of the purchase price as possible.S. insurance companies. real estate investment trusts. Federal Reserve Board estimate for real estate: $13. Does not include implicit rent and capital gains (land-value gains).