Real estate comprises all real property which is a component of a structure that exists merely for the economic, social, political, and aesthetic advantages it brings. Real estate includes such real properties as vacant land, buildings, residential houses, commercial buildings, agricultural lands, mining lands, etc. Real estate has been a profitable business for many centuries now, and it is one sector which have witnessed many innovations and new strategies over the years. However, like all businesses, real estate is affected by market forces, supply and demand, and a number of other factors.
Now, let us discuss some of these key drivers of the real estate industry. The largest single driver of the real estate industry, housing starts, has been the main force behind all the real estate activity for the past few decades. Although housing starts is declining (and may even be going into a decline), there are still a significant number of people who are waiting for housing starts to go down to zero. Housing starts are considered as a critical driver for most new residential construction projects. A critical driver of the real estate industry, housing starts is a key driver of the real estate industry because of the large number of potential buyers it has.
Another driver of the real estate industry, residential real estate, is being considered as the largest single contributor to the economic characteristics of the United States economy. There are two major reasons why land is becoming so important in the economy of the United States and those include (a) the increasing population of the country and (b) the increasing availability of land for development. The rapid rate of urbanization and the continuing increase in the number of people living in cities have created an environment where land can be developed at a faster rate than at any other time in history. As more land is required to build new residences, the cost of constructing such properties has come down considerably, and consequently, the land prices have fallen to historic lows.