Real estate

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Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; 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 is in relation 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, such as vehicles, boats, jewelry, furniture, tools and the rolling stock of a farm.

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. [4]

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. [5] The profession of appraisal can be seen as beginning in England during the 1500's as agricultural needs required land clearing and land preparation. Textbook's 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. [6] Natural law which can be seen as "universal law" was discussed among writters 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 "Law of Nations" which conceptualized the idea of private property. [7] 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. [8] The oldest real estate brokrage firm was established in 1855 in Chicago, IL and was initially known as "L. D. Olmsted & Co." but is now known as "Baird & Warner." [9] 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. [10] 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. [11] 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 morgage insurance for home buyers and this system was implemented by the Federal Deposit Insurance as well as the Federal Housing Administration. [12] In 1938, an amendment was made to the National Housing Act and Fannie Mae which was a government agency was established which served as a secondary market for mortgages and gave lenders more money in order for new homes to be funded. [13] 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 anlyzed with the renting, buying, and financing of homes. [14] Internet real estate as a concept began with the first appearance of real estate platforms on the World Wide Web and occured 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. [15]

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. [16]

According to the Congressional Research Service, in 2021, 65% of homes in the U.S. are owned by the occupier. [17]

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

The size of an apartment or house can be described in square feet or meters. In the United States, this includes the area of "living space", excluding the garage and other non-living spaces. The "square meters" figure of a house in Europe may report the total area of the walls enclosing the home, thus including any attached garage and non-living spaces, which makes it important to inquire what kind of surface area definition has been used. It can be described more roughly by the number of rooms. A studio apartment has a single bedroom with no living room (possibly a separate kitchen). A one-bedroom apartment has a living or dining room separate from the bedroom. Two bedroom, three bedroom, and larger units are common. (A bedroom is a separate room intended for sleeping. It commonly contains a bed and, in newer dwelling units, a built-in closet for clothes storage.)

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 (ESA's) when valuing a property for both private and commercial real estate. [18]

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 1970's 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. [19]

As an investment

A house that was sold in Victoria Australia Bentleigh house.jpg
A house that was sold in Victoria Australia

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. [20]

See also

Related Research Articles

Public housing Residential properties owned by a government

Public housing is a form of housing tenure in which the property is usually owned by a government authority, either central or local.

Apartment Self-contained housing unit occupying part of a building

An apartment, or flat, is a self-contained housing unit that occupies part of a building, generally on a single story. There are many names for these overall buildings, see below. The housing tenure of apartments also varies considerably, from large-scale public housing, to owner occupancy within what is legally a condominium, to tenants renting from a private landlord.

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

Housing estate 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.

Townhouse 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.

A semi-detached house is a single family duplex dwelling house that shares one common wall with the next house. The name distinguishes this style of house from detached houses, with no shared walls, and terraced houses, with a shared wall on both sides. Often, semi-detached houses are built in pairs in which each house's layout is a mirror image of the other's.

A condominium is a building structure divided into several units that are each separately owned, surrounded by common areas that are jointly owned.

Housing cooperative 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. Housing cooperatives 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.

Single-family detached home Standalone house

A stand-alone house is a free-standing residential building. It is sometimes referred to as a single-family home, as opposed to a multi-family residential dwelling.

Duplex (building) 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.

Housing in Japan 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.

Affordable housing Housing affordable to those with a median household income

Affordable housing is housing which is deemed affordable to those with a household income at or below the median as rated by the national government or a local government by a recognized housing affordability index. Most of the literature on affordable housing refers to mortgages and a number of forms that exist along a continuum – from emergency homeless shelters, to transitional housing, to non-market rental, to formal and informal rental, indigenous housing, and ending with affordable home ownership.

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.

Multifamily residential Type of housing development that emphasizes density and proximity of many neighbors

Multifamily residential 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, or stacked on top of each other. A common form is an apartment building. Many intentional communities incorporate multifamily residences, such as in cohousing projects. Sometimes units in a multifamily residential building are condominiums, where typically the units are owned individually rather than leased from a single apartment building owner.

Secondary suite Dwelling on a property separated from the main home

Secondary 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 or in the backyard on the same property. In British English the term annex or granny annex is used instead. 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.

Housing unit

A housing unit, or dwelling unit, is a structure or the part of a structure or the space that is used as a home, residence, or sleeping place by one person or more people who maintain a common household.

Carriage house Outbuildings separate from the living quarters

A carriage house, also called a remise or coach house, is an outbuilding which was originally built to house horse-drawn carriages and the related tack.

Cressingham Gardens

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.

Housing in the United Kingdom Overview of housing in the United Kingdom

Housing in the United Kingdom represents the largest non-financial asset class in the UK; its overall net value passed the £5 trillion mark in 2014. About 30% of homes are owned outright by their occupants, and a further 40% are owner-occupied on a mortgage. About 18% are social housing of some kind, and the remaining 12% are privately rented.

The Canadian property bubble refers to a significant rise in Canadian real estate prices from 2002 to present which some observers have called a real estate bubble. From 2003 to 2018, Canada saw an increase in home and property prices of up to 337% in some cities. By 2018, home-owning costs were above 1990 levels when Canada saw its last housing bubble burst. Bloomberg Economics ranks Canada as the second largest housing bubble across the OECD in 2019 and 2021.

References

  1. "Real estate": Oxford English Dictionary online: Retrieved September 18, 2011
  2. James Chen (May 2, 2019). "What Is Real Estate?". investopedia.com. Retrieved May 13, 2019.
  3. Real Estate. Funk & Wagnalls New World Encyclopedia, 1. 2018.
  4. Real Estate. Funk & Wagnalls New World Encyclopedia, 1. 2018.
  5. Alvik, Ivar (2018). "Protection of Private Property in the Early Law of Nations". Journal of the History of International Law. 20: 220.
  6. Klaasen, R. L. (1976). "Brief History of Real Estate Appraisal and Organizations". Appraisal Journal. 44(3): 376–381.
  7. Alvik, Ivar (2018). "Protection of Private Property in the Early Law of Nations". Journal of the History of International Law. 20: 218–227.
  8. "Louisiana Purchase: Primary Documents in American History". Library of Congress Research Guides.
  9. 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.
  10. "History of National Association of Realtors". National Association of Realtors.
  11. Nicholas & Scherbina, T. & A. (2013). "Real Estate Prices During the Roaring Twenties and the Great Depression". Real Estate Economics, 41. 2: 280.
  12. Greer, J. L. (2014). "Historic Home Mortgage Redlining in Chicago". ournal of the Illinois State Historical Society, 107. 2: 205.
  13. "A BRIEF HISTORY OF THE HOUSING GOVERNMENT-SPONSORED ENTERPRISES" (PDF).
  14. Taylor, K. Y. (2018). "How Real Estate Segregated America". Dissent: 23–24.
  15. "Title 16. Conservation; Chapter 1. National Parks, Military Parks, Monuments, and Seashores; Minute Man National Historical Park". US Legal.
  16. Kimberley Amadeo (March 28, 2019). "Real Estate, What It Is and How It Works". thebalance.com. Retrieved May 13, 2019.
  17. "Introduction to U.S. Economy: Housing Market". Congressional Research Service. Archived from the original (PDF) on March 2021.
  18. Cutting, Calhoun, Hall, Robert H., Lawrence B, 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.{{cite journal}}: CS1 maint: multiple names: authors list (link)
  19. "Global status report for buildings and construction". International Energy Agency. 2019.
  20. "Why Manhattan's Skyscrapers Are Empty". The Atlantic. 16 Jan 2020.
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