Introduction of My Firm - Essay Example

Introduction of My Firm Affiliation Introduction A firm will be introduced in the market and it will be a real e brokerage firm. The firm will assist commercial clients sell and buy real estate properties as well as buy and develop land and property and sale. Any person willing to secure a home, or a place for restaurant or club, clothing boutique storefront or a piece of land will be able to conduct the firm for assistance. The firm will not only deal with buyers and sellers but also those looking for commercial locations, which are for lease.

The firm will also do comparative market analysis (estimation of property value in comparison with other properties), guide the seller or buyer through the process, necessary paperwork preparation for ‘Sale by Owner’ sellers, appraisal of real estate, exchanging property, property auctioning, leases and contracts preparation and consultancy.Supply and Demand for land and buildingsUnder supply will mean lower prices. As a recent example, negotiators saw fast appreciation as well as a frenzied response by the consumers within the real estate market in US from year 2002 to 2005.

The response had been caused by the reason that real estate demand happened to be at all time high at the same time as supply was limited. This demand and supply lead to rapid appreciation, where sellers of homes received multiple offers in a matter of days or even hours (ALTOS, 2014). There was a time within the same period when Southern California homes sold at 18% on average above listed price, the outcome of this market condition within which demand outstripped supply. In July 2014, there were just more than 1,400,000 residential properties within the market which is low.

In 2013 houses for sale inventory raised and it is now increasing slightly throughout the country. ALTOS estimates that in 2015 supply will rise by 10% or about 1,600,000 active for sale properties will be available in the market as at July 2015. That means that prices for properties will go down with time (ALTOS, 2014). In 2010, the required time for sale was t peak indicating high demand hence prices changed significantly. In 2012 and 2013 when there was high demand, only few properties required price reductions.

Property crises throughout the United States are poised for a 5th consecutive year for recovery (ALTOS, 2014). There is still low supply while demand remains healthy due to expanding economy as well as other factors. Both demand and supply conditions are moving to healthy conditions, from extreme bullish conditions (ALTOS, 2014). Price Elasticity of DemandA significant trait of demand curve happens to be the sensitivity of demanded quantity to changes in price. Price elasticity of demand summarizes this.

It can be determined through the ratio of the percentage of change in demanded quantity over percentage price changes. Price elasticity will simply show the percentage at which quantity demanded gets to decrease following a 1% price change for property. If price elasticity for property gets to be less than 1 then demand will be inelastic and the opposite if greater than 1(Maisel, Burnham, & Austin, 1971). Price elasticity of demand at the macro level can assist in gauging the effect of changes in rents or market prices on demand and particularly on the demanded number of units or amount of space.

At the micro level, price elasticity of demand assist developers and investors in assessing how revenues are affected by price increases. Investors and developers always like to face inelastic project demands due to the fact that increase in rents/prices leads to increase in revenues, as absorption/demand will not reduce enough to get rid of gains from increase in rent or prices (Maisel, Burnham, & Austin, 1971).ReferencesALTOS. (2014). US Real Estate 2015:Can the Housing Recovery Extend for One More Year?

Altos Research , 8.Maisel, Burnham, & Austin. (1971). The demand for housing Vol. 53. Review of Economics and Statistics , 410–413.