Solution Manual for
Essentials of Real Estate Economics, 6th Edition
Class Introductions
This is the opportunity for you to introduce yourself to the class as well as the individual students
to introduce them selves. Take this opportunity to determine any specific needs the students
might have in the presentation of the material. Determine individual goals so they can be
addressed, if appropriate. This is also an excellent opportunity to define expectations.
PART ONE
Basic Economic Background For Real Estate Analysis
CHAPTER 1: Introduction to Real Estate Economics
OBJECTIVES
In this chapter you need to discuss the study of economics in relation to real estate activities.
When you have finished your presentation, your students should be able to:
1. Describe how individuals and societies choose to use scarce resources to produce,
distribute, and consume goods and services.
© Cengage Learning 1
,2. Explain the two main categories of economic study −macroeconomics and
microeconomics.
3. Relate what real estate economics is in relation to the basic study of economics.
4. Discuss the that real estate economics helps explain the fluctuations in real estate activity
and how these changes can affect local real estate markets.
Note: number is text page reference
Explain economics is a social science that
is concerned with how individuals and
What is economics
societies choose to allocate scarce
resources & use those scarce resources to
produce, distribute and consume goods and
services.
Distinguish Macro vs. Micro to class
Macroeconomics: the study of the national
economy and its various segments and
includes national income, output,
employment, and growth.
Microeconomics: concerned with
individual units such a business firms and
households.
Ask the students about what products they
choose and the price they pay for those
products.
© Cengage Learning 2
, Ask how price influences there purchasing
decision.
Land and that which is affixed to the land,
that which is appurtenant to the land and
that which is immovable by law.
What is real estate A study that uses economic principles.
Real estate economics is the link between
general economic theory and applied real
What is real estate economics
estate practice.
Stress that this is not the study of general
economics or a course in real estate
practice.
Helps people understand what causes
What real estate economics is not
fluctuations in real estate activity and how
these changes can affect local real estate
markets.
Why study real estate economics
© Cengage Learning 3
, Aids both in understanding what impact
today’s real estate actions will have on
future real estate values & in the systematic
approach in solving real estate problems
and making real estate decisions.
Textbook is divided into four parts.
1. Basic Economic Background For Real
Estate Analysis− covers the first five
chapters and outlines basic economic
principles, explores the role in
government and foreign interest in the
economy, monetary policy, and
discusses the economic characteristics
A general overview
of real estate markets.
2. Understanding Real Estate Markets−
devotes six chapters to regional,
community, and neighborhood real
estate analysis.
3. Major Influences on Real Estate
Development− presents four chapters
on direct government influences on real
estate and covers the subjects on real
property taxation, land-use controls,
© Cengage Learning 4
Essentials of Real Estate Economics, 6th Edition
Class Introductions
This is the opportunity for you to introduce yourself to the class as well as the individual students
to introduce them selves. Take this opportunity to determine any specific needs the students
might have in the presentation of the material. Determine individual goals so they can be
addressed, if appropriate. This is also an excellent opportunity to define expectations.
PART ONE
Basic Economic Background For Real Estate Analysis
CHAPTER 1: Introduction to Real Estate Economics
OBJECTIVES
In this chapter you need to discuss the study of economics in relation to real estate activities.
When you have finished your presentation, your students should be able to:
1. Describe how individuals and societies choose to use scarce resources to produce,
distribute, and consume goods and services.
© Cengage Learning 1
,2. Explain the two main categories of economic study −macroeconomics and
microeconomics.
3. Relate what real estate economics is in relation to the basic study of economics.
4. Discuss the that real estate economics helps explain the fluctuations in real estate activity
and how these changes can affect local real estate markets.
Note: number is text page reference
Explain economics is a social science that
is concerned with how individuals and
What is economics
societies choose to allocate scarce
resources & use those scarce resources to
produce, distribute and consume goods and
services.
Distinguish Macro vs. Micro to class
Macroeconomics: the study of the national
economy and its various segments and
includes national income, output,
employment, and growth.
Microeconomics: concerned with
individual units such a business firms and
households.
Ask the students about what products they
choose and the price they pay for those
products.
© Cengage Learning 2
, Ask how price influences there purchasing
decision.
Land and that which is affixed to the land,
that which is appurtenant to the land and
that which is immovable by law.
What is real estate A study that uses economic principles.
Real estate economics is the link between
general economic theory and applied real
What is real estate economics
estate practice.
Stress that this is not the study of general
economics or a course in real estate
practice.
Helps people understand what causes
What real estate economics is not
fluctuations in real estate activity and how
these changes can affect local real estate
markets.
Why study real estate economics
© Cengage Learning 3
, Aids both in understanding what impact
today’s real estate actions will have on
future real estate values & in the systematic
approach in solving real estate problems
and making real estate decisions.
Textbook is divided into four parts.
1. Basic Economic Background For Real
Estate Analysis− covers the first five
chapters and outlines basic economic
principles, explores the role in
government and foreign interest in the
economy, monetary policy, and
discusses the economic characteristics
A general overview
of real estate markets.
2. Understanding Real Estate Markets−
devotes six chapters to regional,
community, and neighborhood real
estate analysis.
3. Major Influences on Real Estate
Development− presents four chapters
on direct government influences on real
estate and covers the subjects on real
property taxation, land-use controls,
© Cengage Learning 4
