Economic and Physical Characteristics of Land

There are five ECONOMIC characteristics of land. The acronym is D.U.S.T.S.

• DEMAND - The more demand there is for a particular property, the more valuable it is to consumers looking for real estate.
• UTILITY OR USEFULNESS - A three-bedroom house is more useful to consumers than a one- or two-bedroom house.
• SCARCITY - One property will sell quickly if only a few properties in a particular area are on the market.
• TRANSFERABILITY - When loans are available and rates are low, real estate is readily transferable from seller to buyer.
• SITUS - The three most important economic characteristics of real estate are location, location, and location.

Lack of one of these items diminishes the market value of the property, which is the price a buyer will be willing to pay.

There are three physical characteristics of land:

• IMMOBILE - Real estate is permanent.
• INDESTRUCTIBLE - Land is permanent.
• NONHOMOGENEOUS (Uniqueness) - Each parcel of land has its own unique characteristics. There are no two properties that are the same.