Real estate

Last updated

Real estate is property consisting of land and the buildings on it, along with its natural resources such as growing crops (e.g. timber), minerals or water, and wild animals; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general. [1] [2] In terms of law, real relates to land property and is different from personal property while estate means the "interest" a person has in that land property. [3]

Contents

Real estate is different from personal property, which is not permanently attached to the land (or comes with the land), such as vehicles, boats, jewelry, furniture, tools, and the rolling stock of a farm and farm animals.

In the United States, the transfer, owning, or acquisition of real estate can be through business corporations, individuals, nonprofit corporations, fiduciaries, or any legal entity as seen within the law of each U.S. state. [3]

History of real estate

The natural right of a person to own property as a concept can be seen as having roots in Roman law as well as Greek philosophy. [4] The profession of appraisal can be seen as beginning in England during the 1500s as agricultural needs required land clearing and land preparation. Textbooks on the subject of surveying began to be written and the term "surveying" was used in England, while the term "appraising" was more used in North America. [5] Natural law which can be seen as "universal law" was discussed among writers of the 15th and 16th century as it pertained to "property theory" and the inter-state relations dealing with foreign investments and the protection of citizens private property abroad. Natural law can be seen as having an influence in Emerich de Vattel's 1758 treatise The Law of Nations which conceptualized the idea of private property. [6]

One of the largest initial real estate deals in history known as the "Louisiana Purchase" happened in 1803 when the Louisiana Purchase Treaty was signed. This treaty paved the way for western expansion and made the U.S. the owners of the "Louisiana Territory" as the land was bought from France for fifteen million, making each acre roughly 4 cents. [7] The oldest real estate brokerage firm was established in 1855 in Chicago, Illinois, and was initially known as "L. D. Olmsted & Co." but is now known as "Baird & Warner". [8] In 1908, the National Association of Realtors was founded in Chicago and in 1916, the name was changed to the National Association of Real Estate Boards and this was also when the term "realtor" was coined to identify real estate professionals. [9]

The stock market crash of 1929 and the Great Depression in the U.S. caused a major drop in real estate worth and prices and ultimately resulted in depreciation of 50% for the four years after 1929. [10] Housing financing in the U.S. was greatly affected by the Banking Act of 1933 and the National Housing Act in 1934 because it allowed for mortgage insurance for home buyers and this system was implemented by the Federal Deposit Insurance as well as the Federal Housing Administration. [11] In 1938, an amendment was made to the National Housing Act and Fannie Mae, a government agency, was established to serve as a secondary market for mortgages and to give lenders more money in order for new homes to be funded. [12]

Title VIII of the Civil Rights Act in the U.S., which is also known as the Fair Housing Act, was put into place in 1968 and dealt with the incorporation of African Americans into neighborhoods as the issues of discrimination were analyzed with the renting, buying, and financing of homes. [13] Internet real estate as a concept began with the first appearance of real estate platforms on the World Wide Web and occurred in 1999.

Residential real estate

Residential real estate may contain either a single family or multifamily structure that is available for occupation or for non-business purposes. [14]

Residences can be classified by and how they are connected to neighbouring residences and land. Different types of housing tenure can be used for the same physical type. For example, connected residences might be owned by a single entity and leased out, or owned separately with an agreement covering the relationship between units and common areas and concerns. [15]

According to the Congressional Research Service, in 2021, 65% of homes in the U.S. are owned by the occupier. [16]

Single-family detached house in Essex, Connecticut, United States Gingerbread House Essex CT.jpg
Single-family detached house in Essex, Connecticut, United States
Townhouses in Victoria, Australia Townhouses in Victoria Australia.jpg
Townhouses in Victoria, Australia
Major categories

Other categories

The size of havelis and chawls is measured in Gaz (square yards), Quila, Marla, Beegha, and acre.

See List of house types for a complete listing of housing types and layouts, real estate trends for shifts in the market, and house or home for more general information.

Real estate and the environment

Real estate can be valued or devalued based on the amount of environmental degradation that has occurred. Environmental degradation can cause extreme health and safety risks. There is a growing demand for the use of site assessments (ESAs) when valuing a property for both private and commercial real estate. [17]

Environmental surveying is made possible by environmental surveyors who examine the environmental factors present within the development of real estate as well as the impacts that development and real estate has on the environment.

Green development is a concept that has grown since the 1970s with the environmental movement and the World Commission on Environment and Development. Green development examines social and environmental impacts with real estate and building. There are 3 areas of focus, being the environmental responsiveness, resource efficiency, and the sensitivity of cultural and societal aspects. Examples of Green development are green infrastructure, LEED, conservation development, and sustainability developments.

Real estate in itself has been measured as a contributing factor to the rise in green house gases. According to the International Energy Agency, real estate in 2019 was responsible for 39 percent of total emissions worldwide and 11 percent of those emissions were due to the manufacturing of materials used in buildings. [18]

Investment and development

A house for sale in Victoria, Australia House image 2024 b.jpg
A house for sale in Victoria, Australia

Investment in real estate can be categorized by financial risk into core, value-added, and opportunistic. [19] Real estate development can be less cyclical than real estate investing. [20] In markets where land and building prices are rising, real estate is often purchased as an investment, whether or not the owner intends to use the property. Often investment properties are rented out, but "flipping" involves quickly reselling a property, sometimes taking advantage of arbitrage or quickly rising value, and sometimes after repairs are made that substantially raise the value of the property. Luxury real estate is sometimes used as a way to store value, especially by wealthy foreigners, without any particular attempt to rent it out. Some luxury units in London and New York City have been used as a way for corrupt foreign government officials and businesspeople from countries without strong rule of law to launder money or to protect it from seizure. [21]

Professionals

See also

Related Research Articles

This aims to be a complete list of the articles on real estate.

<span class="mw-page-title-main">Housing estate</span> Group of homes and other buildings built together as a single development

A housing estate is a group of homes and other buildings built together as a single development. The exact form may vary from country to country.

<span class="mw-page-title-main">Townhouse</span> Individual urban house in a terrace or row

A townhouse, townhome, town house, or town home, is a type of terraced housing. A modern townhouse is often one with a small footprint on multiple floors. In a different British usage, the term originally referred to any type of city residence of someone whose main or largest residence was a country house.

<span class="mw-page-title-main">Renting</span> Payment for temporary use; hiring

Renting, also known as hiring or letting, is an agreement where a payment is made for the use of a good, service or property owned by another over a fixed period of time. To maintain such an agreement, a rental agreement is signed to establish the roles and expectations of both the tenant and landlord. There are many different types of leases. The type and terms of a lease are decided by the landlord and agreed upon by the renting tenant.

<span class="mw-page-title-main">Condominium</span> Form of ownership of real property

A condominium is an ownership regime in which a building is divided into multiple units that are either each separately owned, or owned in common with exclusive rights of occupation by individual owners. These individual units are surrounded by common areas that are jointly owned and managed by the owners of the units. The term can be applied to the building or complex itself, and is sometimes applied to individual units. The term "condominium" is mostly used in the US and Canada, but similar arrangements are used in many other countries under different names.

<span class="mw-page-title-main">Housing cooperative</span> Type of housing development that emphasizes self-governance and quasi-communal living

A housing cooperative, or housing co-op, is a legal entity, usually a cooperative or a corporation, which owns real estate, consisting of one or more residential buildings; it is one type of housing tenure. Typically housing cooperatives are owned by shareholders but in some cases they can be owned by a non-profit organization. They are a distinctive form of home ownership that have many characteristics that differ from other residential arrangements such as single family home ownership, condominiums and renting.

Real estate appraisal, property valuation or land valuation is the process of developing an opinion of value for real property. Real estate transactions often require appraisals because they occur infrequently and every property is unique, unlike corporate stocks, which are traded daily and are identical. The location also plays a key role in valuation. However, since property cannot change location, it is often the upgrades or improvements to the home that can change its value. Appraisal reports form the basis for mortgage loans, settling estates and divorces, taxation, and so on. Sometimes an appraisal report is used to establish a sale price for a property.

Property management is the operation, control, maintenance, and oversight of real estate and physical property. This can include residential, commercial, and land real estate. Management indicates the need for real estate to be cared for and monitored, with accountability for and attention to its useful life and condition. This is much akin to the role of management in any business.

<span class="mw-page-title-main">Single-family detached home</span> Standalone house

A single-family detached home, also called a single-detached dwelling,single-family residence (SFR) or separate house is a free-standing residential building. It is defined in opposition to a multi-family residential dwelling.

<span class="mw-page-title-main">Duplex (building)</span> Type of residential building

A duplex house plan has two living units attached to each other, either next to each other as townhouses, condominiums or above each other like apartments. By contrast, a building comprising two attached units on two distinct properties is typically considered semi-detached or twin homes but is also called a duplex in parts of the Northeastern United States, Western Canada, and Saudi Arabia.

<span class="mw-page-title-main">Housing in Japan</span> Overview of housing in Japan

Housing in Japan includes modern and traditional styles. Two patterns of residences are predominant in contemporary Japan: the single-family detached house and the multiple-unit building, either owned by an individual or corporation and rented as apartments to tenants, or owned by occupants. Additional kinds of housing, especially for unmarried people, include boarding houses, dormitories, and barracks.

<span class="mw-page-title-main">Commercial property</span> Buildings or land intended to generate a profit, either from capital gain or rental income

Commercial property, also called commercial real estate, investment property or income property, is real estate intended to generate a profit, either from capital gains or rental income. Commercial property includes office buildings, medical centers, hotels, malls, retail stores, multifamily housing buildings, farm land, warehouses, and garages. In many U.S. states, residential property containing more than a certain number of units qualifies as commercial property for borrowing and tax purposes.

In real estate, a condominium conversion or condo conversion is the process of entitling an income property or other lands currently held under one title to convert from sole ownership of the entire property into individually sold units as condominiums. Such entitlement is generally derived from approvals granted by state/provincial and/or local municipal authorities.

<span class="mw-page-title-main">Multifamily residential</span> Type of housing development that emphasizes density and proximity of many neighbors

Multifamily residential, also known as multidwelling unit (MDU)) is a classification of housing where multiple separate housing units for residential inhabitants are contained within one building or several buildings within one complex. Units can be next to each other (side-by-side units), or stacked on top of each other (top and bottom units). Common forms include apartment building and condominium, where typically the units are owned individually rather than leased from a single building owner. Many intentional communities incorporate multifamily residences, such as in cohousing projects.

<span class="mw-page-title-main">Secondary suite</span> Dwelling on a property separated from the main home

Secondary suites (also known as accessory dwelling units (ADU), in-law apartments, granny flats, granny annexes or garden suites) are self-contained apartments, cottages, or small residential units, that are located on a property that has a separate main, single-family home, duplex, or other residential unit. In some cases, the ADU or in-law is attached to the principal dwelling or is an entirely separate unit, located above a garage, across a carport, or in the backyard on the same property. Reasons for wanting to add a secondary suite to a property may be to receive additional income, provide social and personal support to a family member, or obtain greater security.

The term international real estate describes a relatively new phenomenon, that started in the 1980s and kept pace with globalization. The term encompasses real property development, sales and leasing transactions across national borders. International real estate could be viewed as one of the most dynamic branches of real estate although it is, by definition, influenced by fluctuating market value in various sectors between countries, as can be evidenced by the 2008 global credit crisis.

Housing in India varies from palaces of erstwhile maharajas to modern apartment buildings in big cities to tiny huts in far-flung villages. The Human Rights Measurement Initiative finds that India is doing 60.9% of what should be possible at its level of income for the right to housing.

Real estate in Bangladesh refers to the industry and market related to the buying, selling, and development of properties in the country. It is a fastest growing sector in Bangladesh.

The Republic of Panama's real estate industry relies on foreign investment. The sector has grown since 2006, as such investment has helped to fuel Panama's economy and housing market.

<span class="mw-page-title-main">Cressingham Gardens</span> Housing estate in Lambeth, London

Cressingham Gardens is a council garden estate in Lambeth. It is located on the southern edge of Brockwell Park. It comprises 306 dwellings, a mixture of four, three and two-bedroom houses, and one-bedroom apartments. It was designed at the end of the 1960s by the Lambeth Borough Council Architect Edward Hollamby and second architect Roger Westman, and built at the start of the 1970s. In 2012 Lambeth Council proposed demolishing the estate, to replace the terraced houses by apartment blocks. Most of the apartments would then be for sale to the private sector. The residents, those in Lambeth who wish to prevent the gentrification of the borough, and those who want to conserve what they believe to be important architectural heritage, are campaigning to prevent its demolition.

References

  1. "Real estate": Oxford English Dictionary online: Retrieved September 18, 2011
  2. James Chen (May 2, 2019). "What Is Real Estate?". investopedia.com. Archived from the original on August 18, 2000. Retrieved May 13, 2019.
  3. 1 2 Real Estate. Funk & Wagnalls New World Encyclopedia, 1. 2018.
  4. Alvik, Ivar (2018). "Protection of Private Property in the Early Law of Nations". Journal of the History of International Law. 20 (2): 220. doi:10.1163/15718050-19041026. S2CID   158672172.
  5. Klaasen, R. L. (1976). "Brief History of Real Estate Appraisal and Organizations". Appraisal Journal. 44 (3): 376–381.
  6. Alvik, Ivar (2018). "Protection of Private Property in the Early Law of Nations". Journal of the History of International Law. 20 (2): 218–227. doi:10.1163/15718050-19041026. S2CID   158672172.
  7. "Louisiana Purchase: Primary Documents in American History". Library of Congress Research Guides. Archived from the original on 2022-06-25. Retrieved 2022-05-18.
  8. Richardson, Patricia (June 2, 2003). "Father-son team scores big at home; Nearly 150 years old, family-owned Baird & Warner Inc. is a dominant force in the area's residential real estate industry, and shows no signs of slowing down or selling out". Crain's Chicago Business.
  9. "History of National Association of Realtors". National Association of Realtors. 13 January 2012. Archived from the original on 13 May 2022. Retrieved 18 May 2022.
  10. Nicholas, T.; Scherbina, A. (2013). "Real Estate Prices During the Roaring Twenties and the Great Depression". Real Estate Economics, 41. 2: 280.
  11. Greer, J. L. (2014). "Historic Home Mortgage Redlining in Chicago". Journal of the Illinois State Historical Society. 107 (2): 204–233. doi:10.5406/jillistathistsoc.107.2.0204.
  12. "A Brief History of the Housing Government-Sponsored Enterprises" (PDF). Federal Housing Finance Agency - OIG. Archived (PDF) from the original on 2023-03-08. Retrieved 2022-05-18.
  13. Taylor, K. Y. (2018). "How Real Estate Segregated America". Dissent. 65 (4): 23–24. doi:10.1353/dss.2018.0071. S2CID   149616841.
  14. "Title 16. Conservation; Chapter 1. National Parks, Military Parks, Monuments, and Seashores; Minute Man National Historical Park". US Legal. Archived from the original on 2017-07-08. Retrieved 2015-10-04.
  15. Kimberley Amadeo (March 28, 2019). "Real Estate, What It Is and How It Works". thebalance.com. Archived from the original on May 13, 2019. Retrieved May 13, 2019.
  16. "Introduction to U.S. Economy: Housing Market" (PDF). Congressional Research Service. Archived from the original on 2022-07-29. Retrieved 2022-05-18.{{cite web}}: CS1 maint: bot: original URL status unknown (link)
  17. Cutting, Robert H.; Calhoun, Lawrence B.; Hall, Jack C. (2012). "'Location, Location, Location' Should Be 'Environment, Environment, Environment': A Market-Based Tool to Simplify Environmental Considerations in Residential Real Estate". Golden Gate University Environmental Law Journal.
  18. "Global status report for buildings and construction". International Energy Agency. 2019.
  19. Garay, Urbi, Investment Styles, Portfolio Allocation, and Real Estate Derivatives (2016). Garay, U. “Investment Styles, Portfolio Allocation, and Real Estate Derivatives.” In Kazemi, H.; Black, K.; and D. Chambers (Editors), Alternative Investments: CAIA Level II, Chapter 16, Wiley Finance, 3rd Edition, 2016, pp. 401-421.
  20. Geltner, David, Anil Kumar, and Alex M. Van de Minne. "Riskiness of real estate development: A perspective from urban economics and option value theory." Real Estate Economics 48.2 (2020): 406-445.
  21. "Why Manhattan's Skyscrapers Are Empty". The Atlantic. 16 Jan 2020. Archived from the original on 13 April 2021. Retrieved 13 April 2021.