What is real estate economics and finance?
This area of finance involves the analysis, planning and management of financial resources related to real estate, commercial loans and properties. It also includes financial processes around real estate, such as acquisition, development, construction and operation of commercial and residential properties.
Real estate economics is the study of how real estate supply and demand impact the price, trends, and how an investment will be impacted in the long term. Housing economics is related to real estate economics and is focused exclusively on residential properties.
Real estate financing is generally used to describe an investor's method of securing funds for an impending deal. As its name suggests, this method will have investors secure capital from an outside source to buy and renovate a property.
While many areas of studies at the college level do an excellent job in developing these skills, economics does a particularly effective job in that regard. Many economics majors therefore end up with job in the financial world, marketing, real estate development, energy industry, and consulting.
Although they are both business-related topics, they are, in fact, very different. The main topics of a finance degree are financial markets, investments, and money management. In contrast, an economics degree covers economic systems, public policy, and micro- and macroeconomic principles.
Real estate economics is the application of economic techniques to real estate markets. It tries to describe, explain, and predict patterns of prices, supply, and demand.
Real estate affects the economy because it makes up a large portion of individual and business wealth across economic sectors. When real estate prices rise, wealth increases, so individuals and businesses are more likely to borrow and spend.
Finance degrees are generally considered to be challenging. In a program like this, students gain exposure to new concepts, from financial lingo to mathematical problems, so there can be a learning curve.
Overall, a finance degree is worth it for many aspiring professionals. According to the BLS, careers in business and finance can pay above-average salaries and are projected to have above-average growth over the next several years.
As commercial and residential real estate values continue to rise at rates that rival the major stock indexes, you better believe the financial world is in on the gains. You can't buy property without financing; a fact that makes financial services and real estate forever linked on the lending side of the game.
What degree is best for real estate?
Popular majors for future real estate agents include marketing, finance, accounting, psychology, and business.
Economics-related roles tend to offer high-paying salaries to those with a relevant degree. Economics-related roles fall within the business and finance sectors. In 2021, the BLS reported that occupations within this category pay a national average salary of $76,570 annually.
Just as any major has its challenging courses, economics requires the study of complex concepts that don't often have black-and-white solutions. Within the discipline there is a wide range of topics from macroeconomics (the study of economy-wide issues) to microeconomics (the study of individual behavior).
The earning potential and salaries are comparable between the finance and economics fields. While the professions are related to one another, they're also very diverse, and salary can range based on the type and level of the job. As candidates gain more experience, they can typically negotiate for higher salaries.
Economics varies more though. There are very easy courses you can take, as well as extremely challenging ones—especially at the graduate level. If you're just talking about a basic bachelors degree though, then finance is probably a little harder but not by much.
| Average Salary | Projected Job Growth 2021-2031 | |
|---|---|---|
| Data Scientist | $115,240 | 35% |
| Economist | $128,180 | 6% |
| Financial Analyst | $108,790 | 8% |
| Financial Manager | $166,050 | 16% |
How much does an Economist make? As of Feb 2, 2024, the average annual pay for an Economist in the United States is $82,064 a year. Just in case you need a simple salary calculator, that works out to be approximately $39.45 an hour. This is the equivalent of $1,578/week or $6,838/month.
The average economist salary in the USA is $115,638 per year or $55.60 per hour. Entry level positions start at $79,431 per year while most experienced workers make up to $177,310 per year.
| Rank | State | Hourly Rate |
|---|---|---|
| 14 | California | $51.74 |
| 15 | Maryland | $48.60 |
| 16 | West Virginia | $48.55 |
| 17 | Delaware | $47.90 |
Home prices and home sales (overall and in your desired market) New construction. Property inventory. Mortgage rates.
How does real estate relate to economics?
Real estate has been, and remains, the foundation of wealth building for the middle class and a critical link in the flow of goods, services, and income for millions of Americans. Accounting for nearly 17% of the GDP, real estate is clearly a major driver of the U.S. economy.
Taken together, spending within the housing market accounted for 16.7% of GDP in 2021. As shown in Figure 1, housing's share of GDP has generally trended upwards, with the notable exception of the housing market crash in 2007.
- Humanities.
- Liberal Arts.
- Linguistics.
- Music.
- Psychology.
- Religious Studies.
- Social Work.
- Sociology.
Salaries in the finance industry
According to the U.S. Bureau of Labor Statics (BLS), careers in finance pay a median salary of $76,850 — 66% higher than the median salary for all occupations in the nation ($46,310).
- Business Administration/Management: This major typically covers a wide range of business topics, including management, marketing, finance, and human resources. ...
- Marketing: Marketing majors learn about advertising, market research, and consumer behavior.
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