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Land Acquisition and Development Finance Part I - page 3 / 7





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What are the area’s biggest employers and what are the levels of employment or unemployment?

Is there strong economic development activity and, if so, what is forecast?

What are the current interest rates and how are they affecting financing activity – both short term construction and long term mortgage financing?

What are consumer behaviors relating to savings and investment activities?

How much income do consumers have to purchase housing?

What price category sells the most?

Which price category sells the least?

Economic data, such as employment trends, population, age, and income distribution, allow you to evaluate the market opportunities.

The economic base analysis focuses on the various economic influences on a market. It explores these questions:





What are economy?

the trends related to the general health Is there growth or recession occurring?

Employment Trends

Employment trends in an area affect land development. New job growth drives housing demand (new and resale). For example, analysts estimate that for every 1.25 new non- farm labor jobs, a new demand for one housing unit is created. Thus, these trends can signal opportunity. They also indicate an area’s stability and growth potential, and

characterize the existing and future affordability of housing and the types and lifestyles.

labor force. Employment trends point of housing needed based on community

to the income

Population Data

Population counts and projections provide a basic measure of demand for housing within a defined market area. It stands to reason that the more people there are in an area, the more housing that is required. Population growth is the sum of natural increase and migration. Natural increase is the net sum of births over deaths. Migration can be positive or negative, depending on whether more people are moving in or out of an area. Market analysis always distinguishes between permanent and seasonal population so that market opportunities related to various seasonal fluctuations in population can be identified. For example, the growth of the farm worker population during peaks in the

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