VALUE STABILITY IN LOCAL REAL ESTATE MARKETS

Bubbles in Real Estate Markets

Real estate markets and bank distress

We investigate the relationship between real estate markets and bank distress among German universal and specialized mortgage banks between 1995 and 2004. Higher house prices increase the value of collateral, which reduces the probability of bank distress (PDs). But higher prices at given rents may also indicate excessive expectations regarding the present value of real estate assets, which can...

Assessing facade value - how clients make business cases in changing real estate markets

RELEVANCE: The value of any intervention in the built environment is most relevant for the stakeholders that are investing in it. For them all costs need to be balanced with benefits not necessarily directly financial, but adding value to the performance of the accommodated organization. Business cases contain performance criteria like competitive advantage (branding the organization), producti...

Knowing your Neighborhood: Asymmetric Information in Real Estate Markets∗

We study equilibrium asset market outcomes when there is heterogeneity in information about asset values among both buyers and sellers. We argue that in residential real estate markets a key source of information heterogeneity pertains to hard-toobserve characteristics of the neighborhood that are subsequently capitalized in land prices. Sellers are usually better informed about neighborhood ch...

Market Efficiency in the Emerging Securitized Real Estate Markets

This paper tests the random walk hypothesis and market efficiency for twelve emerging as well as for four developed securitized real estate markets from 1992 to 2009. Random walk properties of equity prices influence return dynamics, and market efficiency is often considered an essential criterion in the assessment of the functionality of markets and the asset pricing process, which is of signi...