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The price of houses, when and how to make these types of transactions?
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The price of houses, when and how to make these types of transactions?
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10.12.2013, 20:32
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The price of houses refers to a segment of the closely related fields of housing economics that is narrower in scope, concentrating on residential real estate markets, as does the research of real estate trends focus on the business and structural changes impacting the industry. This draws on partial equilibrium analysis (supply and demand), urban economics, spatial economics, extensive research, surveys and finance.

The main determinant of price for housing is demographic. However other factors like income, price of housing, cost and availability of credit, consumer preferences, investor preferences, price of substitutes and price of complements all play a role. The core demographic variables are population size and population growth: the more people in the economy, the greater the demand for housing. But this is an oversimplification. It is necessary to consider family size, the age composition of the family, the number of first and second children, net migration (immigration minus emigration), non-family household formation, the number of double family households, death rates, divorce rates, and marriages. In housing economics, the elemental unit of analysis is not the individual as it is in standard partial equilibrium models. Rather, it is households that demand housing services: typically one household per house.

Buying and/or moving into a home cost much more than most types of transactions. These costs include search costs, real estate fees, moving costs, legal fees, land transfer taxes, and deed registration fees. Transaction costs for the seller typically range between 1.5 - 6% of the purchase price. In some countries in Continental Europe, transaction costs for both buyer and seller can range between 15 - 20%.

The market adjustment process is subject to time delays due to the length of time it takes to finance, design, and construct new supply, and also due to the relatively slow rate of change of demand. Because of these lags there is a great potential for imbalance in the short run. Adjustment mechanisms tend to be slow, relative to more fluid markets.

Real estate is immobile. Consumers come to the good rather than the good going to the consumer. Because of this, there can be no physical market place. Prices of house can vary with the location area as well. A house in the poor suburb will be much cheaper that a mansion in a high residential area.

Conclusion is that prices can turn to one
 
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