Submit in MSWord putting answers below each Sub/Question
1) REAL ESTATE MARKETS
(a) Define and identify the economic purpose of: 1) the Property Market and 2) the Asset Market. Identify one exogenous force acting upon each market.
(b) Identify the primary determinants on capitalization rates and their expected directional impacts (positively or negatively correlated) on the cap rate.
(c) How would the asset/property framework explain why a reduction in long-term mortgage rates has the opposite impact on residential market values than a reduction in short-term rates.
(d) Many expect long term interest rates to rise after Covid subsides. Explain the impact on market values, rents, and construction. Include the role of linkages across markets in determining the combined impact on the sector as a whole. A diagram is not required, but you may find using one helpful.
a. Define Agglomeration and explain why it is often characterized as the source of urban efficiency.
b. Describe the multiplier process and its significance to growth of an urban economy.
c. Using the Seattle Outlook Precis posted on NYU Classes, profile the economic bases of Seattle and briefly describe the city’s prospects for future growth using the most relevant economic terms learned.
d. Explain the statement, “An urban economy dependent on any particular set of export industries is likely to face an episodic economic future.”
e. Explain why globalization leads to further urbanization.
3) LAND USE AND THE IMPACT OF LOCAL GOVERNMENTS
(a) Define externality. Provide one example in relation to real estate markets.
(b) Define (1) fiscal zoning and (2) fiscal capitalization.
(c) Explain why the property tax is often described as the most important own-source revenue of local governments.
(d) What is the long-run economic incidence of an increase of the property tax? Explain.
4) ECONOMICS OF HIGHEST AND BEST USE
(a) Define Highest and Best Use.
(b) Explain the statement: “Cities are Value Propositions, not Cost Propositions.”