The Real Estate Markets and Analysis

Physical Characteristics of Real Estate

Land has three physical characteristics. (1) Immobility: land cannot be moved, so real estate markets are local and value depends on surrounding conditions. (2) Indestructibility: land itself is permanent even if buildings are destroyed, which makes it stable collateral, although improvements wear out. (3) Nonhomogeneity (uniqueness): no two parcels are identical, if only because each has a different location; this is why a court can order specific performance of a land contract. Exam trap: immobility explains why real estate is affected by things outside the property lines, such as a new highway or a nearby landfill.