Real Estate

Fin345 Session 2 Why Study Real Estate?

Part 1 – Present Economic Considerations

Demographics shaping your future and the future of real estate

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Housekeeping Items

1. Seating Charts 2. Finance 336 and WA. State R.E. licensure

• RE Fundamentals 60 hrs. (FIN 345=60 + FIN 346=15) • RE Practices 30 hours available on line from:

• Rockwell ceshop proSchools and many more • Cost for proschools $199 • Exam prep. tests usually run around $99

• Pass broker exam • Fingerprinting

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Monday’s Homework Assignment

BOOK - Read Chapter 1

 Question – Labor Stats. 1. Define U-3 and U-6 - One or two sentence hint: (http://www.bls.gov/lau/stalt.htm) 2. Find the U-3 and U-6 Percentages for Washington State

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Today’s Topics

The Economy – effects upon, and from, R.E.

– Demographics (for whom)

– Employment (why is this important to R.E.?) – Age cohorts (what effect could this have upon R.E.?)

– The R.E. market changes -- but -- it never goes away – R.E. related investing -- knowing where to look and what to look for (for you and your clients)

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Unemployment Figures A Closer Look

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Employment Changes Over Time

Animated Unemployment Map – Used with permission of LaToya Egwuekwe

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Discussion of U-3 and U-6 figures

• • • • • • • What figure do we hear about on the news? How does the BLS obtain these numbers? As students, are you in the labor force? What does U-3 represent? What does U-6 represent? Is U-6 all the unemployed? What are impacts on developers? … buyers? … sellers? … rentals? … CRE (retail, office, mfgr.) • 60K new jobs, economy needs 150K for pop. growth … why did U-3 go down from 8.4 to 8.2? • What’s LA’s U-6 - (Depression = 25%) – No soup lines? What about credit scores?

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Let’s look at the numbers

1. Unemployed by education – (Here’s the good news) 2. Alternate measures of unemployment by states 3. Alternative measures of unemployment national averages

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Labor Force Participation Rate

• • If the...