Real Estate Markets and Econoimic Depression (Essay Sample)

Real Estate
Name
Institution
Real Estate
Introduction
Real estate is property consisting of land and the buildings that are available. Further, it could comprise the natural resources that are available (Brown & Matysiak, 2000). Notably, there resources such as minerals, crops and the immovable property. Real estate could further describe the entire process of buying, selling, renting, building or housing. Various issues are revolving around real estate. For purposes of this discussion, much of the emphasis would be on real estate being the process entailing the purchase and sale of property of any value. Real estate would be discussed regards the issue of the changing retail model. The retail sector related to real estate continues to face significant challenges in the recent economic times.
Real estate changing retail model
There are changes in the property sector when it comes to the consumers and their preferences. Real estate service providers have had to grapple with the idea of customizing the merchandise they are offering to the particular preferences of the various demographic groups in existence. The "baby boomers" and "millennial" have a significant impact on the real estate sector. Each of the group has a unique way in which they would like their houses to be ((Tobias & Vavaroutsos, 2012). Issues to be considered by real estate developers include the design of properties including amenities, entertainment facilities, and distribution of infrastructure (Tobias & Vavaroutsos, 2012). Overall, the concept of demographic shifts has a significant impact on the real estate sector. The sector is also currently faced by a decrease in the purchasing power of consumers. The current economic times, preceded by the 2008 global financial crisis has subjected many customers to hard times such that they are unable to make purchases of property. Despite the decrease in the financial capabilities of the potential buyers, real estate service providers are under pressure to ensure that the properties continue to enjoy occupancy. Further, pressure is on to ensure that such property keeps abreast with the changing technological advances currently witnessed. It is vital for the real estate property owners to ensure that they are in a better position to adjust to the changing stature of the retailers.
Real Estate Markets and Economic Depressions
Closely related to the concept of changes in the retail sector is the idea of the real estate markets and economic depressions. The economic depression witnessed globally in the year 2008 did have a significant impact on the real estate sector (Brueggeman & Fisher, 2008). The economic depression was defined by a decrease in the financial capabilities of many. Countries across the globe were affected alongside the nationals. The period witnessed a reduction in jobs and businesses closing down. For the same reason, there was a significant decline in the overall funds available to either purchase or invest in real estate development. Housing, as part of real estate, remains to be an essential sector but has been faced with various challenges. One of the primary causes of the vulnerabilities experienced by the industry was the economic depression. Even though there was recovery witnessed, there is need to ensure that the industry does not face another unsustainable occurrence.
The economic recession, however, did come with its share of advantages especially on the trends of purchases of property. Notably, some of the clients did focus on the acquisition of property owned by businesses that were facing a financial crisis. Because of the economic crisis that was faced by many of the businesses, most of them decided to dispose of properties that they had but at a lower price (Chan, Erickson & Wang, 2002). Such has made it possible for individuals to purchase properties that they would otherwise not be in a position to buy initially. The situation was further evident especially in instances where some of the companies did run bankrupt in the cause of operations. The effect of the same did live many of the businesses with no option but to sell off property.
Effect of the current economic landscape
The current economic conditions are challenging. There is more to be done as a way of ensuring that it becomes possible for all groups of individuals to be able to access cheap housing and property. Even though the economic depression did define tougher economic times, Economic downturns have resulted in a decrease in the overall rate of consumer spending. Because of the reduction in the rate of consumer spending, there has been a decline in the demand for property. The same has resulted in an increase in the overall commercial space that is available for leasing. The situation has further caused the rents to decrease. Compared to the previous times when the economic conditions were favorable and people had a high purchasing power, and the cost of the property was high. However, with the advent of the economic depression, the financial crisis had varying effects on the entire concept of real estate. Fortunately, with the economic challenges faced, it has made it possible for the tenants to be in a better position to negotiate for prices and acquire property.
Recent developments that have impacted the area as pertains to legislation, job market, and taxation
Legislation has had an impact on real estate markets and economic depression. The rules that are in place have had a significant effect on the demand for property and the overall prices. Through the same, the effect translates to the real estate markets. The government has to play when it comes to the determination of the prices through factors such as the tax credits, subsidies, and deductions. Through such ways, the government is in a better place to boost the demand for real estate if they enact such incentives. The effect is that the market for the real estate will be increased as demand would go great courtesy of removal of any barriers. During the economic depression, the United States, for example, took the initiative of introducing the homebuyer’s tax credit to see to it that the sale and purchase of homes were made easier. The measure was in response to the economic times that had previously been witnessed in the year 2008. Many people were able to purchase homes because of the incentives that they had been given by the government. The job market did have an effect on the real estate markets as well. The economic recession was for instance defined by significant layoffs. Many people did lose their jobs. The impact of the same was a decline in the source of ...