19. A real estate licensee explains that a home with an unobstructed view is often sold at a higher price than those with limited views. This is an example of which of the following economic characteristics?
Answer: B
A home with an unobstructed view is often sold at a higher price due to scarcity.
The phenomenon where a home with an unobstructed view commands a higher price exemplifies the economic characteristic of scarcity, as such desirable views are limited in number and create increased value.
A) Fixity
Fixity refers to the concept that land and improvements are permanent and cannot be moved. While it is an important characteristic in real estate, it does not explain why views affect property prices. Therefore, this option is incorrect.
B) Scarcity
Scarcity is a fundamental economic principle that indicates that limited availability of a desirable resource increases its value. In this context, unobstructed views are rare and sought after, thus leading to higher prices for homes that feature them. This option accurately describes the situation presented.
C) Indestructibility
Indestructibility implies that land cannot be destroyed or diminished in value over time. Although it is relevant to real estate, it does not pertain to the pricing of homes based on their views. Thus, this option does not apply to the scenario.
D) Setback value
Setback value relates to the potential for a property to increase in value over time due to surrounding developments or zoning changes. While it is a relevant economic consideration, it does not specifically address the relationship between view quality and home prices. Therefore, this option is incorrect.
Conclusion
Scarcity is the defining characteristic that explains why homes with unobstructed views are priced higher; the limited availability of such views enhances their perceived value. Options A, C, and D fail to address the core economic principle at play, making B the only correct choice in this context.