... 12 RealEstate Modelling and Forecasting 1.8 Econometrics in real estate, finance and economics: similarities and differences The tools that we use when econometrics is applied to realestate ... Chicago, IL 60606–6307, UnitedStates Tel: (+1) 312 651 3000; Fax: (+1) 312 651 3668; Web: www.spss.com StataCorp, 4905 Lakeway Drive, College Station, Texas 77845, UnitedStates Tel: (+1) 800 782 ... the national level Databases such as the United Kingdom’s Investment Property Databank (IPD) and that of the UnitedStates National Council of RealEstate Investment Fiduciaries (NCREIF) go...
... theory Before describing the most important summary statistics used in Realestate analysis: statistical tools 45 work with realestate data, we define the terms population and sample, which have precise ... answers 48 RealEstate Modelling and Forecasting This measure of spread is usually considered superior to the range, as it is not so heavily influenced by one or two extreme outliers that, by definition, ... characterise realestate (and economic) time series, and to characterise the residuals from a time series model In figure 3.2, the leptokurtic distribution is shown by the bold line, with the normal by...
... explained by reference to changes in one single explanatory variable x What if the realestate theory or the idea that is sought to be tested suggests that the dependent variable is influenced by more ... each with a separate realestate theory for explaining the variation in some variable, yt The respective models selected by the researchers could be yt = α1 + α2 x2t + ut (5 .31) yt = β1 + β2 x3t ... coefficient by chance alone 124 RealEstate Modelling and Forecasting Trying many variables in a regression without basing the selection of the candidate variables on a realestate or economic theory...
... and tenant improvement estimates are provided by a property consultancy The same source computes effective real rents by discounting cash flows with a real interest rate Hendershott makes the following ... intercept in equation (7.7) divided by the estimated coefficient on υ t+j −1 ∗ ● The equilibrium real gross rent rate g is given by the following expression: g ∗ = real risk − free rate + risk premium ... is also constant, at 0.05 (5 per cent) 212 RealEstate Modelling and Forecasting As a result, the equilibrium real rent varies through time with the real risk-free rate The author also gives examples...
... models in realestate In the realestate literature, ARMA models are used mainly for short-term forecasting and to provide a benchmark by which to judge structural models 258 RealEstate Modelling ... models Their study is conducted in three regions – the United States, the United Kingdom and Australia – and the focus is on securitised realestate returns We now briefly discuss how time series ... the United States, the All REIT (equity and mortgage REITs) index series is available from January 1972 to November 1998 In the absence of a comparable securitised realestate series in the United...
... in real estate, the reader is also referred to the paper by Wilson and Okunev (2001) , who combine negatively correlated forecasts for securitised realestate returns in the United States, the United ... forecasts, which in this case is eight years 9.3 Forecast accuracy studies in realestate Forecast evaluation in the realestate literature is relatively new Recent studies focus on ex post valuation ... case scenario for near-future realestate market conditions in the United Kingdom The AR(1) model in this study for both rent growth and total returns is yt = a + byt−1 + εt (9.24) where yt represents...
... identified 310 RealEstate Modelling and Forecasting One obvious implication of this rule is that equations in a system can have differing degrees of identification, as illustrated by the following ... value of the real risk-free rate is per cent The expression for the cash flow return is r + dep + oper = real risk-free rate + premium + dep + oper = real risk-free rate + 2% + 2% + 1.5% = real risk-free ... determined by scaling down the required cash flow return (real risk-free rate + 0.055) to the effective rent in 1983 Hence the R ∗ series was the effective real rent in 1983 multiplied by the required...
... theory Before describing the most important summary statistics used in Realestate analysis: statistical tools 45 work with realestate data, we define the terms population and sample, which have precise ... answers 48 RealEstate Modelling and Forecasting This measure of spread is usually considered superior to the range, as it is not so heavily influenced by one or two extreme outliers that, by definition, ... characterise realestate (and economic) time series, and to characterise the residuals from a time series model In figure 3.2, the leptokurtic distribution is shown by the bold line, with the normal by...
... 76 RealEstate Modelling and Forecasting ● There are bound to be random outside influences on y that, again, cannot be modelled For example, natural disasters could affect realestate performance ... error or residual term in (4.7); all this equation states ˆ is that, given a particular value of x, multiplying it by β and adding α will ˆ 80 RealEstate Modelling and Forecasting ˆ give the model ... growth changes by one percentage point (from, say, 1.4 per cent to 2.4 per cent – i.e employment growth accelerates by one percentage point), real rent growth will tend to change by 3.27 percentage...
... explained by reference to changes in one single explanatory variable x What if the realestate theory or the idea that is sought to be tested suggests that the dependent variable is influenced by more ... each with a separate realestate theory for explaining the variation in some variable, yt The respective models selected by the researchers could be yt = α1 + α2 x2t + ut (5 .31) yt = β1 + β2 x3t ... coefficient by chance alone 124 RealEstate Modelling and Forecasting Trying many variables in a regression without basing the selection of the candidate variables on a realestate or economic theory...
... and tenant improvement estimates are provided by a property consultancy The same source computes effective real rents by discounting cash flows with a real interest rate Hendershott makes the following ... intercept in equation (7.7) divided by the estimated coefficient on υ t+j −1 ∗ ● The equilibrium real gross rent rate g is given by the following expression: g ∗ = real risk − free rate + risk premium ... is also constant, at 0.05 (5 per cent) 212 RealEstate Modelling and Forecasting As a result, the equilibrium real rent varies through time with the real risk-free rate The author also gives examples...
... in real estate, the reader is also referred to the paper by Wilson and Okunev (2001) , who combine negatively correlated forecasts for securitised realestate returns in the United States, the United ... forecasts, which in this case is eight years 9.3 Forecast accuracy studies in realestate Forecast evaluation in the realestate literature is relatively new Recent studies focus on ex post valuation ... case scenario for near-future realestate market conditions in the United Kingdom The AR(1) model in this study for both rent growth and total returns is yt = a + byt−1 + εt (9.24) where yt represents...
... These residuals are expected to 358 RealEstate Modelling and Forecasting reflect only the variation in realestate returns This series, denoted PROPRES, is the realestate market return measure used ... in the UK realestate returns index using macroeconomic factors, as the last row of table 11.9 shows Of all the lagged variables in the realestate equation, only the lags of the realestate returns ... that is assumed to determine the intertemporal behaviour of realestate returns It is possible that realestate returns may reflect realestate market influences, such as rents, yields or capitalisation...
... relationships and cointegration in realestate The concept of cointegration and the implications of cointegrating relationships are very relevant in the realestate market Realestate economic and investment ... How long is the long run in practice in real estate, though? The study of the long-run relationships in realestate should, ideally, include a few realestate cycles and different market contexts ... particularly in commercial real estate, even in those countries with long histories Data availability therefore limits the usefulness of cointegration in realestate More and more realestate studies now...
... deals, in multiple states selling over 100 million dollars of realestate I have taught hundreds of students in all 50 states and even in other countries I still run a realestate wholesaling ... rehabbing or any other realestate strategy, can be done in any kind of realestate market, good or bad It can be done in every city across the nation big or small Nothing really affects it It’s ... cost anything Realquest.com - Realquest is a paid tool but they are much more accurate than Zillow The MLS The MLS is by far the best tool and the most accurate It’s the tools used by realtors and...
... Investing in realestate is no different, for it will be just a means to an end It’s like trading our time for dollars at our jobs We don’t get up every morning at 6:30 to be at work by because ... vigilant, we will realize the highest probability of success in reaching our goals Thankfully, this probability of success is especially true when it comes to investing in realestate Finally, ... a friend, not a foe You will learn later that if you have a lot of levered realestate in an inf lationary time, your estate will grow at an astronomical rate But if you’ve converted all your...
... CDs or stocks or mutual funds But remember, realestate benefits from leverage, and leverage is what puts realestate investing into a stratosphere by itself Because of ( & (
... and research to work by investing and buying your first property This is where the real work starts, because it’s not just a mind game now, it’s for real When you’ve finally decided it’s time to ... the entire company Well, in realestate you don’t have to start out with a 20-unit building to be successful You can start small, too, in the “mail room” of realestate investments How about ... investing in residential real estate, these components of return will help you reach your goals: Cash f low Loan reduction Appreciation Tax benefits To take full advantage of realestate as an investment,...