Studying Economics
by Veronica Cabrera
May, 14 2012
I am currently studying for my broker's license. The testing requires the study of five different courses.
I have already completed Property Management and I am starting Economics now.
I thought that I should share some interesting information that I am learning.
According to the William G. Willson and Leigh Conway, authors of Real Estate Economics Firs Edition, "The real estate market is an IMPERFECT MARKET!"
It is imperfect, because it is not perfect! Seriously, that is what the books says, so I am just repeating it.
In order for me to pass the test I just have to memorize and repeat whatever the book says.
Authors stated, "for a market to be perfect the product needs to be homogeneous, there is complete information and no buyers or sellers need to influence the market"
They also stated that to create a perfect market we have to have the following:
- Large number of buyers and sellers
- Perfect and complete information
- Freedom to enter and exit the market
- Homogeneous product of availability to substitute
- Product needs to be mobile and portable
- NO single buyer or seller is large enough to influence the market price
- Government plays a minor role in pricing
The authors blame the mortgage brokers for the economy meltdown " The greedy and unethical mortgage brokers who pushed inappropriate loans on borrowers in order to collect very lucrative fees, with no guidelines, no restrictions and no oversight, mortgage brokers were overcome by greed".
And they name as victims "unsuspecting investors and ultimately the American public"
They mentioned that some consequences were " in 2008 and 2009 the Mortgage Bankers Association reported that over 2 million foreclosures were filed. This is the highest level reported since the Mortgage Banker Association started this survey 37 years ago"
I see why it is called an "IMPERFECT MARKET!"
Veronica Cabrera, Realtor
Realty ONE Group
Huntington Beach, Riverside, San Bernardino, CA
veronicasreohomes.com
(714) 809-6521
R.E. Lic. #0143140
