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Format: 1 online resource (513 pages)

Edition: 1st ed.

ISBN: 9780415676342 , 9781136208454

Series Statement: Routledge Advanced Texts in Economics and Finance Series

Content: Real Estate Economics: A point-to-point handbook introduces the main tools and concepts of real estate (RE) economics. It covers areas such as the relation between RE and the macro-economy, RE finance, investment appraisal, taxation, demand and supply, development, market dynamics and price bubbles, and price estimation

Note: Cover -- Real Estate Economics A point-to-point handbook -- Copyright -- Contents -- List of figures -- List of tables -- List of boxes -- Abbreviations -- Preface -- 1 Real estate (RE): an overview of the sector -- Learning outcomes -- 1.1 Definition of real estate (RE) -- 1.2 RE subsectors (or submarkets) -- 1.3 The location factor -- 1.4 Location and 'authentic' versus 'derived' demand for RE -- 1.5 Other characteristics of RE - and wider interactions -- 1.6 Why study RE economics? -- 2 RE: tools of analysis -- Learning outcomes -- 2.1 Mathematical techniques -- 2.1.1 Differentiation -- 2.1.2 Partial and total differentiation -- 2.1.3 Optimization -- 2.1.4 Optimizing functions of more than one variable -- 2.1.5 Constrained optimization -- 2.1.6 Implicit differentiation -- 2.1.7 The S curve -- 2.2 Economic concepts -- 2.2.1 Elasticity -- 2.2.2 Indifference curves -- 2.2.3 Useful demand and utility functions -- 2.2.4 From Cobb-Douglas utility to Cobb-Douglas demand -- 2.2.5 Income and substitution effects -- 2.2.6 Income and substitution effects: locating the tangency solutions -- 2.2.7 Income and substitution effects in housing -- 2.2.8 Elasticity of substitution (εs) -- 2.2.9 Characteristics theory -- 2.2.10 Isoquants, isocosts, MPP, MRP, and profit maximization -- 2.3 Statistical primer: regression, co-integration, Granger causality -- 2.3.1 Regression -- 2.3.2 Regression and causality -- 2.3.3 Co-integration -- 2.3.4 More on time series -- 2.3.5 A graphical example -- 2.3.6 Granger causality -- 2.3.7 Further reading -- Summary of main points -- Review questions and exercises -- 3 RE in the wider economy -- Learning outcomes -- 3.1 RE in the National Accounts -- 3.2 RE investment and economic growth -- 3.2.1 Multiplier effects -- 3.2.2 A limit to the share of construction in GDP? -- 3.2.3 Who pulls whom - GDP or construction? , 3.3 Determinants of RE investment -- Tobin's q -- 3.3.1 Utility-driven investment -- 3.3.2 Tobin's q -- 3.3.3 RE investment as inflation hedge -- 3.3.4 The role of 'fundamentals' -- 3.3.5 What about non-residential property? -- 3.4 The effect of RE prices on the economy -- 3.4.1 The consumption channel -- 3.4.2 The investment channel -- 3.4.3 The financial sector channel -- 3.4.4 The inflation channel -- 3.4.5 The government's fiscal position channel -- 3.5 The housing wealth effect (HWE) -- 3.5.1 The HWE as a home-equity adjustment -- 3.5.2 The HWE as a PILC adjustment -- 3.5.3 The HWE as a consumer-credit adjustment -- 3.5.4 How strong is the HWE effect, then? -- 3.6 Homeownership and the labour market -- Summary of main points -- Review questions and exercises -- 4 RE finance: loans, equity withdrawal, and MBSs -- Learning outcomes -- 4.1 Loans, mortgages, and maths -- 4.2 Forward mortgages: basic loan types -- 4.2.1 The interest-and-capital repayment loan -- 4.2.2 The interest-only loan -- 4.2.3 The low-start loan -- 4.2.4 The stabilized loan -- 4.2.5 The select-payment loan -- 4.2.6 The cap-and-collar loan -- 4.2.7 The index-linked loan -- 4.3 Remortgaging and equity withdrawal -- 4.3.1 Variable versus fixed interest rates -- 4.3.2 From prepayment to refinancing -- 4.3.3 Cash-out refinancing -- 4.3.4 Tapping into one's home equity -- 4.4 Reverse (or equity release) mortgages -- 4.4.1 Mechanics of a reverse mortgage -- 4.4.2 A right interest rate for a reverse mortgage? -- 4.5 Reverse mortgages in the USA and the UK -- 4.6 Housing finance and homeownership -- 4.7 Mortgage securitization (MS) -- 4.7.1 How MS works -- 4.7.2 Types of MBSs -- 4.7.3 Reasons for MS -- 4.7.4 Effect on RE market -- Summary of main points -- Review questions and exercises -- 5 RE as an investment decision -- Learning outcomes -- 5.1 Definition of commercial RE , 5.2 The language of the market place -- 5.2.1 Some definitions -- 5.2.2 Investment vehicles -- 5.3 Characteristics of investment in RE -- 5.4 A portfolio approach to RE investment -- 5.4.1 Portfolio basics -- 5.4.2 RE and correlation between assets -- 5.4.3 RE across countries: correlations (A) -- 5.4.4 RE andamp -- other asset classes: correlations (B) -- 5.4.5 An application -- 5.5 Property valuation -- 5.5.1 Investment appraisal: NPV and IRR -- 5.5.2 Special cases in property valuation -- 5.5.3 The capitalization rate -- 5.5.4 The cap rate cycle -- 5.5.5 The band-of-investment concept -- 5.6 Physical life and economic life -- 5.7 Property derivatives and options -- Summary of main points -- Review questions and exercises -- 6 Demand for office-retail-industrial space -- Learning outcomes -- 6.1 Demand for office space -- 6.1.1 Vacant space-occupied space -- 6.1.2 Mathematical modelling of the short term -- 6.1.3 Mathematical modelling of the long term -- 6.1.4 A disturbance and re-establishment of equilibrium -- 6.1.5 The office rental cycle and the NVR -- 6.1.6 Determinants of office demand (and supply) -- 6.1.7 How is the NVR estimated? -- 6.1.8 Office market analysis -- 6.2 Demand for retail space -- 6.2.1 The geographical frame of reference -- 6.2.2 Methods of finding trade areas: the checklist method -- 6.2.3 Methods of finding trade areas: the analogue method -- 6.2.4 Methods of finding trade areas: multiple regression analysis (MRA) -- 6.2.5 Methods of finding trade areas: gravity modelling -- 6.2.6 Methods of finding trade areas: use of GIS -- 6.3 Demand for industrial space -- Summary of main points -- Review questions and exercises -- 7 Housing demand and supply -- Learning outcomes -- 7.1 Dwelling price versus dwelling rent -- 7.2 Residential demand -- 7.3 Modelling residential demand: a (demanding!) example , 7.3.1 The De Bruyne-Van Hove model -- 7.4 Adding supply: an extended model -- 7.5 Determinants of housing demand and supply -- 7.6 A practical example of housing 'demand' calculation -- 7.7 Construction, development, and supply changes -- 7.8 A developer's profit maximization problem -- 7.8.1 Profit-maximization in the face of planning constraints -- 7.8.2 The RRR approach to development -- 7.8.3 Profit maximization in the face of a land price -- 7.8.4 More on the negotiation dimension -- 7.9 What price for land? -- 7.9.1 The 'Anglo-American' mode of residential development -- 7.9.2 The 'Greek' mode of residential development -- 7.9.3 Concluding remarks -- Summary of main points -- Review questions and exercises -- 8 Construction flows and market equilibrium -- Learning outcomes -- 8.1 Capital stock adjustment models (CSAMs) -- 8.2 The DiPasquale - Wheaton (DiPW) model -- 8.3 Summing up the DiPW model -- 8.4 From the DiPW model to a modified CSAM -- 8.4.1 Example A: linear demand -- 8.4.2 From example A: estimating supply -- 8.4.3 Example B: curvilinear demand -- 8.5 CSAMs and the role of expectations -- 8.5.1 'Excessive' response to a price shock -- 8.5.2 'Myopic' and 'rational' expectations -- 8.5.3 Developers' responses to prices in the face of uncertainty -- 8.6 The 'riddle' of mean reversion -- 8.7 The capitalization factor k in the DiPW model -- 8.8 RE shocks and cycles -- 8.8.1 Question (a): one cycle or many? -- 8.8.2 Question (b): origin of the shock -- 8.8.3 Question (c): pro- or counter-cyclical? -- 8.8.4 Question (d): short cycles, long swings? -- 8.8.5 Question (e): different sectors, different cycles? -- 8.8.6 Question (f): cycles and expectations -- 8.9 Appendix: a note on difference equations -- Summary of main points -- Review questions and exercises -- 9 RE taxation -- Learning outcomes -- 9.1 An introduction to taxes and taxation , 9.1.1 Kinds of taxes -- 9.1.2 Principles of taxation -- 9.2 (In)ability to pay RE taxes -- 9.3 Is it better to tax property or income from it? -- 9.4 Property taxes, income taxes, and growth -- 9.5 Are RE taxes capitalized in RE prices? -- 9.5.1 Inheritance taxes -- 9.5.2 Tax capitalization and tax incidence -- 9.5.3 Capital-gains taxes -- 9.5.4 Sales taxes -- 9.5.5 (Recurrent) property taxes -- 9.5.6 More on the capitalization issue -- 9.6 Taxation of imputed rental income -- 9.6.1 The 'imputed rent is income' argument -- 9.6.2 The 'income redistribution' argument -- 9.6.3 The 'tenure-neutrality' argument -- 9.6.4 The 'equal treatment of investments' argument -- 9.6.5 The 'taxation efficiency' argument -- 9.6.6 Efficiency and preferences -- 9.7 Appendix: incidence calculation of an ad valorem tax -- Summary of main points -- Review questions and exercises -- 10 Land uses, values, and taxation -- Learning outcomes -- 10.1 The land-use pattern in a market economy -- 10.2 Land uses as expressions of urban hierarchies -- 10.3 Land uses outwards from a city's core -- 10.4 A firm's bid-rent curve -- 10.4.1 A constant-revenue firm -- 10.4.2 A variable-revenue, constant-price firm -- 10.4.3 A variable-revenue, variable-price, and variable-quantity firm -- 10.5 A household's bid-price curve -- 10.5.1 A more traditional approach -- 10.6 How bid-curves help create a land-use pattern -- 10.7 A bid-curve for all land uses in an urban area -- 10.8 Land-value taxation (LVT) -- 10.8.1 Preliminary remarks -- 10.8.2 Tax incidence and deadweight loss (DWL) -- 10.9 Critical appraisal of arguments favouring LVT -- 10.9.1 Argument 1 -- 10.9.2 Argument 2 -- 10.9.3 Argument 3 -- 10.9.4 Argument 4 -- 10.9.5 Argument 5 -- 10.9.6 Concluding remarks -- 10.10 Economic rent from land -- 10.11 Appendix: derivation of bid-rent curve and rend-gradient -- Summary of main points , Review questions and exercises

Additional Edition: Print version Pirounakis, Nicholas G. Real Estate Economics Oxford : Taylor & Francis Group,c2013 ISBN 9780415676342

Language: English

Keywords: Electronic books

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