Why Real Estate Economics are Useful for Real Estate Investors?Real estate economics deals with the forces that determine the levels and movements of demand, supply and price/rent levels in the different property markets, such as residential, office, retail and industrial. Within this context it also examines the inefficiencies and idiosyncrasies in the supply, demand and price adjustments which cause cyclical movements in these markets. In particular, real estate economics examines the major macroeconomic forces that determine aggregate and marginal (additional) demand and supply at the market level and the methods by which they can be quantified, and analyzed. Furthermore, it examines simple and more advanced econometric techniques which can be used to model and predict the behavior of demand, supply and prices. The economics of the property market examine also and the microeconomic factors at the property-specific level, as such factors determine how individual property behavior may deviate from average market behavior. These factors include the characteristics of the property and its immediate location, as well as its position within the urban fabric and its accessibility to important destinations for satisfaction of a household’s multiple needs.
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