ADMS 3810 Lecture Notes - Lecture 2: Capital Good, Final Good, Business Cycle
27 Apr 2018
School
Department
Course
Professor
ADMS 3810
Lecture 2
Price of real estate is set by demand, supply and public policy
Demand: real estate is both a capital good and a consumer good.
1. Consumer goods sold directly to the occupant-user
2. Capital goods: People buy them because they can earn income out of
it
Supply
1. Time : the long construction period for real estate means that
supply often lags behind demand. This affects the marketplace
in both expansionary and contracting phase of the business
cycle.
2. Place fixed location
3. Substitution: to some degree, one kind of estate may be
converted to another in order to meet shifts in demand. convert
factory to apartment building
Public Policy
• Zoning
• Environmental
Participants
• User
o Owner-occupants
o Tenants
• Supplier adjust to demand due to long lead time of building it
o Developer, Surveyors, Architects and Engineers
o General Contractors and Subcontractors
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