Please explain Demand for real estate is a function of all of the following factors EXCEPT? A) The market area’s economic base. B) Competitive properties. C) Population characteristics of the community. D) The terms and conditions of mortgage financing. Thanks guys S
is it B?
D - We’re not talking about finacing, just demand.
Yes. Answer is D. For many different areas of the curriculum, they have similar questions. Financing decisions are always separate for actual supply/demand decisions.
map, why do think B? Does this question looks ambiguous to anybody or just to me? S
I was thinking that the degree of competition in a market influences the price of the product: more houses on the market, buyer’s market; less, seller’s market. That should be a shift along the demand curve. The other 3 move the curve. Is B the right answer?
the questions isn’t ambiguous at all if you consider the one item on there that is financing specific like we said.
The answer is B and it says it is the determinant of supply not demand. Can somebody elaborate on this. Thanks S
Determinants of demand – moving the curve, not the quantity demanded -not along the curve: number of consumers tastes and preferences of consumers income price of related goods, substitutes and complements expectations about future (future prices, future income, etc) Determinants of supply – moving the curve of supply, not the quantity supplied – move along the curve: Number of suppliers Resource prices Technological changes Prices of other products that the producer produces Expectations about future (future prices, costs, etc) The market area’s economic base: consumers will gravitate toward properties depending on how is economically developed is the area-> determinant of demand. Competitive properties: number of suppliers -> that’s a determinant of supply (more suppliers (of competitive properties, meaning of similar characteristics)->lower prices, buyer’s market, less suppliers-> higher prices, seller’s market) Population characteristics of the community: tastes and preferences-> that’s a determinant of demand. The terms and conditions of mortgage financing: income and expectations about future->that’s a determinant of demand