Exam 5: Real Estate Economics and Value

Environmental protection and subdivision reform laws affect the availability and cost of vacant land.

The agents of production are responsible for both tangible and intangible benefits of real estate.

The principle of highest and best use suggests that land must always be valued in its present use.

The principle of substitution is basic to all three approaches to value.

Demand and scarcity are both essential elements of value.

A strong demand can be effective without purchasing power.

High valued properties are not generally affected by the proximity of lower valued ones.

Zoning is one of the economic forces affecting value.

The broad forces affecting value are physical, social, economic and political in nature.

Disposable income is the amount of family income available after paying rent or other housing costs.