Final answer:
Physical factors affecting the real estate market include the economic context, like the Great Recession's impact, geographical location, construction quality, and current weather conditions, all contributing to the market's volatility and property values.
Step-by-step explanation:
Physical factors can significantly impact the real estate market in a number of ways. During the early 2000s, a real estate bubble was observed as a result of rapid population growth in Western cities, causing an uptick in real estate prices and extensive suburban development around cities like Las Vegas and Denver. However, the Great Recession in the late 2000s led to a market collapse, with high foreclosure rates in areas such as Nevada, Utah, and Idaho underlining the volatility of the housing market related to economic downturns.
Moreover, the physical aspects of a property, including its geographical location and its construction quality, are also critical. For instance, the proximity to employment opportunities, the quality of local school districts, and the climate can all influence real estate values. Factors such as material costs and the need to design energy-efficient houses are indicative of the impact physical factors have on the market, both in terms of construction expenses and long-term property value.
In addition to construction and location, the current weather can affect the economy, potentially impacting the desirability of real estate in certain regions. Inclement weather conditions, for example, can influence the attractiveness of areas for potential buyers, thereby affecting real estate demand and prices.