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Industry Overview
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Industry Overview
The real estate industry’s pared-down definition is land. However, it’s much
more complicated than that. The industry involves the buying, selling,
renting, leasing, and management of commercial, residential, agricultural,
and other kinds of property, including all the functions that support such
activity, such as appraising and financing. The successful realtor is
necessarily a shrewd salesperson with a deep knowledge of real estate markets
and a broad understanding of the contracts, laws, and tax regulations that
apply to real estate transactions.
Thinking big is part and parcel of the real estate industry, and grandiose
speculation has created some of America’s greatest fortunes. John Jacob Astor
traded in his empire of beaver pelts for a gamble on uptown Manhattan real
estate and in the process became the richest man in America. Arthur Levitt’s
own development virtually created that fixture of American life: the suburbs.
More recently, moguls like Sam “the grave dancer” Zell and the perennially
overreaching Donald Trump have made fantastic fortunes on real estate
gambles. Even for nonbillionaires in the industry, the thrill of deal making,
the promise of financial reward, the potential to have a lasting impact on
cities and communities, and the sociability make real estate a rewarding
profession.
The real estate market has undergone dramatic changes in recent years. Real
estate investment trusts (REITs) have become major sources of financing for
property acquisition and development. The total market capitalization of
public REITs has grown from $10 billion in 1991 to more than $218 billion in
171 funds today, causing a revolution in real estate financing, similar to
the rise of the individual investor in the stock market. Sources of financing
have been steadily moving from cabals of private investors to public equity,
in the form of REITs. With this shift has come more transparency in the
market and a slow whittling away of the old boys network for which real
estate investment is infamous. This transparency also shines a critical light
on investment strategies, which are now subject to public scrutiny, and are
therefore more accountable to the will of investors. Families with their
savings invested in REITs are unlikely to tolerate the wild swings of fortune
of stereotypical real estate tycoons; Wall Street and REITs have had a
stabilizing effect on the industry. Finally, mergers and acquisitions have
increased the size and scope of firms involved in real estate, with companies
like brokerage and hotel franchiser Cendant leading the charge.
Real Estate Job Listings
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