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Definition and Examples of Real Estate

Real estate, sometimes referred to as "real property," is technically land plus any other tangible improvement that might rest upon it or be installed in it. The improvement might be a building that's been erected there, or a roadway. It can be something that's been inserted into the ground, such as a septic system. Land with any of these structures is said to be "improved." It's "unimproved" when it lacks them.


Your home is real estate, but so is vacant land you might own. Real estate can be a skyscraper in New York City or a patch of unimproved desert land that can't be built upon.


How Real Estate Works

Real estate involves numerous facets because it doesn't simply exist. It can segue from unimproved to improved. It can be purchased or sold. It might be owned by a government, a corporate entity, or by a private party. Certain components can directly impact the economy, such as consistent improvement of land and the individuals or entities that facilitate those transfers of ownership.


Construction of New Buildings

New home building is a critical category. It includes the construction of single-family homes, townhouses, and condominiums. The National Association of Home Builders (NAHB) provides monthly data on home sales and average prices. The data on new home sales is a leading economic indicator.2 It takes four months to establish a trend for new houses sold.

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