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Chapter 26: Real Estate and the Economy

Ability of area to produce a commodity or service that will bring in money from outside.

Industries that produce goods & services.BaseExportPrimary

Economic Base

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SHORT-RUN SUPPLY-DEMAND

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SHORT-RUN DROP IN DEMAND

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LIFETIME INCOME CURVE

Effect on Property ValueVulnerabilityEmployment MultiplierHousing demand – short & long

run increases & decreases in supply & demand

effect on inflation

ECONOMIC FACTORS

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AGE DISTRIBUTION OF U.S. POPULATION

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AGE DISTRIBUTION FOR 2000–2006

TAX LAWS1997 TAXPAYER RELIEF ACT1986 TAX BILL

FISCAL POLICYMONETARY POLICYSECONDARY MORTGAGE MARKET

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GOVERNMENTAL IMPACT

Cost-Push Demand-PullMonetaryReal-CostTax BenefitsWatch the Feds

INFLATION

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What’s the future outlook?

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Key Terms

Base industry Cost-push inflation Demand-pull inflation Economic base Federal Reserve Board

Monetize the debt Real Real-cost inflation Service Industry

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