CHARACTERISTICS OF REAL ESTATE

Question 1

Economic Characteristics of Land

Answer 1

There are generally four economic characteristics of land: scarcity, modification, fixity, and situs.

Question 2

Scarcity

Answer 2

Scarcity is a shortage of land in a given geographical area where there is a great demand for land. Ex NYC (It is a manmade characteristic.)

Question 3

Modification

Answer 3

Modifications, also called improvements, are man-made developments made to real property. modifications (or improvements) don’t always “improve” real property, and “improvements”
can both raise and lower land values.

Question 4

Fixity

Answer 4

Fixity, also called investment permanence, means that land, buildings, and other improvements
require long periods of time to pay for themselvesFixity also refers to the immobility of property. Land cannot be moved from one location to another
where it would be more valuable. For the most part, improvements to land follow this same general
rule. With very few exceptions, the cost of moving a house, as well as preparing a foundation at a
new site, exceeds the value of the home once the move is done. This is why an investment in real
estate is regarded as a fixed or “sunk” cost.

Question 5

Situs

Answer 5

Situs, or location preference, refers to a location from an economic rather than a geographic
standpoint. Residential, commercial, and industrial properties have different location preferences
for different reasons. situs can change with time.

Question 6

Topography

Answer 6

Topography is the recording of relief or terrain, the three-dimensional quality of the
surface, and the identification of specific landforms. In general, topography aims to determine the position of any point in
terms of both a horizontal coordinate system (such as longitude and latitude) and
altitude.

Question 7

3 Physical Characteristics of Land

Answer 7

Immobility, Indestructibility, Nonhomogeneity

Question 8

Immobility

Answer 8

You cannot move a parcel of land. Yes, it is true that soil, sand, gravel, and minerals can be moved
by nature (from erosion) or man (by digging).

Question 9

Indestructibility

Answer 9

Land is indestructible; it is durable.

Many people buy land because it is durable. This is true in a physical sense, of course, but land’s
ability to appreciate in value has to do with economic durability, not durability in the sense of it
being physically indestructible.

Question 10

Nonhomogeneity

Answer 10

Also known as heterogeneity, nonhomogeneity means that no two parcels of land are exactly alike-
because no two parcels of land can occupy the exact same space on the globe. nonfungible commodity; meaning, land is unsubstitutable.