Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Dealing with Economic Externalities in the Real Estate Industry. Letter addressed to a mayor - Essay Example

Comments (0) Cite this document
Market externalities can be a very costly to the society and lead to economic imbalance. An externality is a benefit or a cost that is derived as a direct side effect of the production or consumption of a product and which is incurred or benefited by another person other than the actual producer or consumer…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.5% of users find it useful
Dealing with Economic Externalities in the Real Estate Industry. Letter addressed to a mayor
Read TextPreview

Extract of sample "Dealing with Economic Externalities in the Real Estate Industry. Letter addressed to a mayor"

Download file to see previous pages One of the most important externality can be found in the mortgage subsector. In the housing industry, an externality called a positional externality has led to products being very expensive. Positional externalities happen when the individual using the product or the service intend to one-up each other. This is something that has been witnessed in the real estate industry for a long time. As Grant (37) says, externalities affect all categories of land use and this is something that must be considered in a more modern and serious manner. While this kind of an economic externality has affected the industry in a long time, the effects have been felt the most in recent time. In fact, economic externalities in the mortgage subsector were highly associated with the recent economic recession in the United States. Increased availability of mortgage service has led to most people affording to buy their own homes through mortgage financing. While increased home ownership is important and necessary for the growth of the economy, it can lead to dire repercussions when done in the wrong way. As the availability of mortgage financing increased and more people were now looking for homes to buy, the costs of homes increased in a very fast rate that exceeded the market growth and inflations rates. This sudden hiking of the cost of owning a home happened so fast that at some time, the market started imploding. At this point, many individuals could who had taken loan could no longer to be able to remit their mortgage repayments and this unfortunately led to foreclosure of their homes. They could also not be able to sell off the homes at a cost high enough to cover the original costs of the homes. In this way, mortgage financing can be seen as having a great external cost to most individuals who would otherwise be able to buy their own homes without having to depend on mortgage financiers. A closer analysis reveals that increasingly availability of rarely controlled mortgages have two types of external costs to the economy. First, it makes homes unfairly expensive for would-be home owners. Secondly, it leads to the crunching of the real estate market making it impossible for individual who had bought their homes at exceedingly high costs to be able to recover their costs by selling their homes. Need for control The mortgage subsector has been left uncontrolled and unregulated for a very long time. This has led to the participators in the industry to operate in a way that is less professional and also in a way that has led to many individuals having to lose a lot of money through a mortgage industry that is operated in a racket manner of operation. Most mortgage regulation laws are archaic and are not able to meet the needs of the modern mortgage market. Regulating the industry will be important for protecting the many people who will definitely otherwise be affected by the poorly managed mortgage industry. Regulation in the industry should be geared towards ensuring that mortgage providers are careful and professional in the way they offer this product. Of essence will be to ensure that the mortgage providers do not operate in a way that will negatively affect their customers. The government should come up with a framework to guarantee that the mortgage providers are careful in the way they provide the product in terms of ensuring that they serve customers who are ready and capable to repay the mortgage. This will reduce or eliminate the number of home ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Dealing with Economic Externalities in the Real Estate Industry Essay”, n.d.)
Dealing with Economic Externalities in the Real Estate Industry Essay. Retrieved from
(Dealing With Economic Externalities in the Real Estate Industry Essay)
Dealing With Economic Externalities in the Real Estate Industry Essay.
“Dealing With Economic Externalities in the Real Estate Industry Essay”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Dealing with Economic Externalities in the Real Estate Industry. Letter addressed to a mayor

Real estate industry

On the other hand, civil law jurisdiction uses the term immovable property. The term real, in law, is defined as relating to a thing as distinguished from a human being. The law therefore gives a broad distinction between personal property and real property (Singh & Komal, 243). People use real estate for different purposes such as recreation, offices, manufacturing, retailing, housing, farming, ranching, entertainment and worship. The failure or success of these uses depends on many interconnected factors such as: government regulations demographics, economic conditions, transportation, tax policy, and management expertise, , topography and climate. Real estate industry proprietors’ goal is value creation through developing land...
20 Pages(5000 words)Research Paper

Real Estate

In tandem with some good prospects for other GCC states, such as Qatar which is expected to benefit from the real estate boom fueled by its hosting of the World Cup in 2022, Kuwait is seen as enjoying a boost to its real estate sector in general moving forward, with positive signs in 2012. Of the three segments, residential, investment and commercial segments in Kuwait, it is the residential sector that has seen much growth in 2012, followed by the investment segment, and with the commercial segment trailing and exhibiting problems and poorer prospects overall relative to the residential and investment segments of the Kuwaiti real estate sector (Ejaz). Taking a step back, prior to the financial crisis of 2007-2008, it is worth no...
10 Pages(2500 words)Research Paper

Real Estate

It has become extremely wealthy after gaining foreign direct investment funding in the 1970s. The country has a rather high Human Development Index when compared to other Asian countries the country has risen 8 ranks on the Human Development Index.
Real GDP in 2005 grew quite rapidly by 8.2% to AED357.6bn on the back of extremely strong economic activity, and the prices of oil also grew at a fast pace resulting in big fiscal as well as external surpluses. Economic Growth in the last few years has highly increased the per capita GDP to a record high of US$28,147 in the year 2005 as compared with US$24,380 the year before (Marcus & Howard p 78).
When Gulf Cooperation Council (GCC) countries are analyzed it can be said that...
8 Pages(2000 words)Essay

The Real Estate Industry

.... Although real estate activity has a national economic impact, the real estate business is essentially a local business, dealing with property in a particular area or neighborhood. According to Wade Gaddy and Robert Hart (2003), “each geographic area has different types of real estate and different conditions that drive prices. This relates back to the old adage of ‘location’ being important; a parcel of real estate cannot be moved, is never exactly like another parcel, and its value is impacted by surrounding land uses.” (p. 5) Two main branches make up the real estate industry – residential and commercial real estates. In most places, residential sales account for a large share of real estate activity that is why there are real estate...
5 Pages(1250 words)Assignment

Real Estate

Introduction: Owning a home is the dream of every person and this is one of the first aims once he or she is settled in a comfortable job. The personor couple would live initially in a rented apartment and maybe purchase all the furniture which they plan to use in their new home. Once this stage is over, the next step would be to find an agent or local builder and scout for suitable homes. The price of a home is usually calculated based on the cost per square feet that is prevalent in the area. This paper is an attempt at estimating the cost of my residence based on cost per square foot that currently exists in Charlotte, North Carolina. This exercise has two aims. One is to see whether my house will fetch a goof price in the mark...
2 Pages(500 words)Essay

Letter to Mayor

...March 23, Mr. A. C. Wharton Mayor, Memphis How Memphis can be developed into more caring Dear Mr. Wharton, The Forbes’ listing of Memphis as third most miserable city with escalating crime rate and corrupt official has significantly marred the image of its people. I, as a responsible citizen of Memphis, would like to contribute towards its improvement, both in terms of public image and making efforts to reduce crime through the following initiatives. I would therefore, greatly appreciate if you, as a Mayor as well as a common man, would also join in my efforts to initiate public awareness campaign to promote community service and help create action groups. I believe that the escalating crime rate is primarily because of the social inequity...
2 Pages(500 words)Assignment

Real Estate

...Real E BUSN121 Karin Conradson Real E Real e is an industry which always remains in business because whatever the conditions maybe everyone needs a roof to cover and protect themselves. But throughout the last years real estate industry has suffered from great loss. In any business the market always has ups and downs which are unavoidable; likewise real estate market has the same pattern. Since the past decade the housing market has suffered from crash. The real estate market between 1991 and 2000 was flourishing and more and more people started to buy new property and take property on rent. The people took properties on mortgages and also took loans from the bank. The economy also started to flourish as the real estate market has a direct...
2 Pages(500 words)Essay

Real estate

... Ways That Real Property Is Transferred and the Procedures for Doing So Real e refers to land, buildings, houses andany other developments that may be connected to real property (Abts, 2002). Real estate is also known as real property, immovable property or realty. Legal ownership of real property rests with the owner of the legal documents of ownership such as the title deeds. Transferring property from one person to the other involves transferring the documents of ownership to the new owner (Abts, 2002). There are several rights of ownership that are recognized by law as far as real estate is concerned. The various types of estates are basically determined from the type of language used in the ownership documents such as the deeds...
2 Pages(500 words)Essay

Industry Analysis ( Real Estate )

...INDUSTRY ANALYSIS (REAL E INDUSTRY ANALYSIS (REAL E Al Mazaya Holding Company is a real e company that provides a wide range of real estate products and services across the range. It develops large areas in selected zones to offering ready to use commercial and residential spaces (GulfBase, 2015). Ezdan Hotel & Suites is said to be the biggest Hotel and Suites in the Middle East. Their property boasts more than 2200 suites and studios which covers short and long stay accommodation requirements (GulfBase, 2015). Birwa is real estate Company that was as a result of contribution of Emir and the government of Qatar to build a modern country that is accompanied by diverse economy for the benefit of the future generation (GulfBase, 2015). United...
1 Pages(250 words)Research Paper

A Short History of Japanese Film Industry

The response generated from other regions is good enough yet questionable. What do these Asian productions have that attracted the international scene? What does the Korean wave really mean? Furthermore, were their productions in the recent years created in the nature that the other regions would appreciate, diverting from the contemporary film style they used to execute locally so that it would sell in the global market?

The transition from traditional to contemporary entertainment in Japan came a few years before the advent of the 20th century with the production of the first Japanese films, Bake Jizo1 and Shinin No Sosei2, both said produced in 1898. The next year, a short production entitled Geisha no Teodora was cr...
9 Pages(2250 words)Case Study

The Economic Impact of the Emergence of China and India

... and materials that are part of Toyota’s operations—the supply side of the automobile industry. The effects of this inflation do not stop in the supply side of the automobile industry which could significantly impact a firm’s cost structure. With the rising fuel prices, demand for automobiles is threatened too, as fuel is a complementary product of automobiles. At least in order to address the threat in the demand, Toyota put on the initiative to create a hybrid car which has saved its operations from this. The other economic impact of the emergence of China and India is its low-cost labor strategy that makes outsourcing to these countries attractive to automobile manufacturers. This can give a company the cost advantage it needs...
10 Pages(2500 words)Assignment

The Real Victims of Hitlers Regime

... of the German army. By two years of his selection as the Chancellor, by the spring of 1935, more than 280,000 people were recruited to the German Army. (Balfour, 34) Hitler administration did not only stop by recruiting such a large number of people but at the same time the whole system did spent a great deal of money to furnish the army with modern equipments. Along with the plan of making the nation’s army base strong, Hitler also planned to introduce several policies that would provide a boost to the German economy but there were no such plan that would provide economic support to Germany in times of national crisis. Balfour observes, “Hitler’s ideas about economics were based on common sense rather than theory. He came to power without...
7 Pages(1750 words)Case Study

Economic Analysis of India

The country’s economy is fast growing with a stable political system that encourages foreign investment although with certain restrictions. The country generally has good energy, transport and communication systems which make the cost of doing business affordably.

The Republic of India found South of Asia is by far the world’s most populous democracy and ranks seventh largest in terms of geographical area (Brown, 1994). India is also the second most highly populated country in the world. The country has a rich culture with four major religions having originally emerged from it; Sikhism, Buddhism, Hinduism, and Jainism. The Indian Republic consists of seven union territories and 28 states and ranks twelfth la...
8 Pages(2000 words)Case Study

Structure of the Educational System in Morocco and Its Capacity for Addressing the Needs of the Hospitality Industry

...Independent Research Study An investigation into the Structure of the Educational System in Morocco and its Capa for Addressing the Needs and Expectations of the Hospitality Industry in the Country Submitted by : Submitted to : Course : Date : September 29, 2009 Word Count : 3,069 words STATEMENT OF AUTHORSHIP “I confirm that no part of this work, except where clearly quoted and referenced, has been copied from material belonging to any person e.g. from a book, handout, another student. I am aware that it is a breach of GIHE regulations to copy the work of another without clear acknowledgement and that attempting to do so render me liable to disciplinary procedures.” ________________ Table of Contents I. Consultant’s Brief 4...
15 Pages(3750 words)Research Proposal

Business Plan Real Estate Agency

re representing our company as their business consultants and our responsibilities are limited to the knowledge of the client’s business and information provided by the client.
The company Of-Fit has been operating as office supplies and equipment supplier since 1998. Their corporate office is in Aberdeen and it has excellent industry relations. The company is a sole proprietorship and its owner is Mr. Andrew Schwatz who has been working in the industry for more than 20 years. The company current staff is 8 and its revenues are £115,690 and £156,178 in 2008. The company aims to expand its operations in other business areas and regions of the UK.
The detailed business plan developed for this report incor...
12 Pages(3000 words)Business Plan

Real Cost of Capital

Also, other academics criticize the models' failure to incorporate other determinants of risks such as firm size, book-to-market ratio, etc. then the plain correlation of the risk of the assets to the market. Despite these criticisms, many practitioners in the corporate world still use CAPM for capital budgeting. These issues are probed in this paper.
CAPM or the capital asset pricing model has been a tool in modern finance that has been extensively used for capital budgeting. The capital asset pricing model is useful in estimating the required return on an equity stock of a company (Perold 2004). Under the principle of finance that rational investors will require higher returns to compensate them when they undertake projects...
8 Pages(2000 words)Assignment

Bernard Madoff : A Scapegoat of the Economic Crisis

Darwin was condemned and treated with contempt by the Church for proposing the theory of evolution that linked all living matter in the earth, including humans. In the case of Bertrand Russell, he was imprisoned as a conscientious objector, for expressing his opposition to British participation in the First World War. These are typical examples of people being wrongfully punished when they were guilty of no crime or fraud or misdoing. It would be highly improper to associate Bernard Madoff with the aforementioned luminaries, for he was truly guilty of carrying out the biggest financial fraud in modern history. At the same time, it would be simplistic to classify him as a victim of the contemporary judicial system. The truth, in fa...
6 Pages(1500 words)Assignment

International Business: World Economic Forum and Davos 2010

While each force of globalization is important, the technological revolution has impacted the business models, value creation and differentiation (Spelman, 2010). The cloud computing technologies that have made the popular social networking applications possible are now being applied to development, healthcare, and society. Today mobile telephones are more like powerful computers that take care of many of the societal challenges facing both developed and developing countries (Evans, 2010). In Chile, new software enables weather information to farmers who can now make informed decisions on when and how to sow or harvest the crops. However, the fear or ignorance of cloud computing technology could harm the chances of the SMEs becomi...
7 Pages(1750 words)Coursework

Globalization and World Economic Forum at Davos 2010

... globalization is determined by the extent of globalization of customers, customer needs, distribution channels and marketing strategies of the players in the industry (Stonehouse et al, 2004). The organizations are resorting to global marketing due to three business development trends: Buyers with similar needs proliferating across the world The readiness of the consumers to trade off their specific needs to get better deal such as lower price or better quality Aggressive pursuit of economies of scale by the companies across their value chain (Dornier et al, 1998) The phenomenon of globalization of markets has resulted in both advantages and disadvantages. It has resulted in the convergence in the requirement of features in a product...
7 Pages(1750 words)Coursework

Real Estate Transactions: Residential Real Estate

...Real Estate Transactions: Residential Real Estate Introduction For a preponderance of individuals, capitalizing in residential property is a measure whose benefits can only be regarded as a long term initiative. However, this perception, limited as it may be, is predicted to take a back seat in the situation whereby a property bubble bust does occur in Australia. A real estate bubble is the situation whereby properties, in this case Australia, are valued much higher than their actual worth. This circumstance does, at regular intervals, impact both local and consequently global markets. However, this unfortunate contingency aside, residential property has a distinctive feature that is responsible for differentiating it from other avenues...
10 Pages(2500 words)Dissertation
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Dealing with Economic Externalities in the Real Estate Industry. Letter addressed to a mayor for FREE!

Contact Us