Axiom 1: Location, location, location...

This adage is usually expressed as a joke.

“What are the three most important real estate characteristics?”

Of course, the answer is “location, location, location.” It is certainly true that location attributes, or situs, are very important property features. As we should know by now, the spatial dimension of real estate is what makes every property different and this asset class truly unique.

Real estate and basically all other business disciplines can be thought of as branches or subsets of general economics. Do you remember a basic definition of 'economics' from you first economics class? It might go something like this, economics is the study of the allocation of scare resources. If everything was free and abundant, there would be no need for the study of economics.

Finance is a specialization developed from economics. Do you remember a definition of 'finance' from your first finance class? It might go something like this, finance is the allocation of scarce resources (i.e., money usually) over time. Time is an important dimension in finance and the reason we make such a bid deal about the time-value-of-money.

Real estate can be viewed as a specialization in finance. Do you remember a definition of 'real estate'? It might go something like this, real estate is the allocation of scare resources (i.e., real estate in this case!) over time and space. Space or geography is an important dimension of real estate and the reason why we make such a big deal about location, location, location.