nach oben

The Journal of Real Estate Finance and Economics

Erschienen in:

01.01.2012

Information Producers and Valuation: Evidence from Real Estate Markets

verfasst von: David H. Downs, Z. Nuray Güner

Erschienen in: The Journal of Real Estate Finance and Economics | Ausgabe 1-2/2012

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

This paper examines valuation and its relation to information production by licensed appraisers across real estate markets. The testable implications are discussed for either a peer monitoring or a crowding out effect in the data. The empirical model is estimated with data for all 50 US states and DC covering the sample period from 1999 to 2008. While analysis is primarily cross-sectional and not causal, the evidence is consistent with theory stating that the minimum quality associated with residential licensure standards may be too low. In contrast, the evidence suggests certified residential standards afford information producers the opportunity to signal or information consumers the ability to screen based on quality.

Vorheriger Artikel Distressed Properties: Valuation Bias and Accuracy

Nächster Artikel Real Estate Ownership, Leasing Intensity, and Value: Do Stock Returns Reflect a Firm’s Real Estate Holdings?

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Nur mit Berechtigung zugänglich

This work benefited from a number of excellent points raised by anonymous referees. We are particularly grateful to an anonymous referee’s suggestion that we augment our initial analysis of price-to-income with a, arguably, more theoretically appropriate price-to-rent ratio.

See Jaffe (1988) for an evolutionary theory of trade associations with emphasis on real estate appraisers as information specialists.

For example, Cole et al. (1986), Dietrich et al. (2000), Gwin and Maxam (2002), Gwin et al. (2006), Hendershott and Kane (1995), LaCour-Little and Malpezzi (2003), Lentz and Wang (1998), Muller and Reidl (2002), Rudolph (1998), Smolen and Hambleton (1997), Worzala et al. (1998).

The count data that we assembled in this project differ somewhat from the summary data presented by the ASC. This difference is attributed to the fact that we control for duplicate records within a state.

The summary statistics for certified general appraisers are not reported here to conserve space. They are available from the authors upon request. Since the number of all appraisers is the sum of licensed, certified residential and certified general appraisers, numbers reported in Panels B and C of Table 1 do not add up to the numbers reported in Panel A. The summary statistics for all appraisers by state for the sample period are reported in the Appendix.

It is straightforward to show a house price to gross annual income ratio of 4 based on (a) 30% of income to housing cost underwriting, (b) nominal insurance and property taxes, (c) a fixed rate mortgage of 6% or higher, and (d) an 80% LTV.

Arnott, R., & Stiglitz, J. (1991). Moral hazard and nonmarket institutions, dysfunctional crowding out or peer monitoring? American Economic Review, 81(1), 179–190.

Case, K. E., & Shiller, R. J. (1990). Forecasting prices and excess returns in the housing market. Real Estate Economics, 18(3), 253–273.CrossRef

Cole, R. D., Guilkey, & Miles, M. (1986). Towards an assessment of reliability of commercial appraisals. The Appraisal Journal, 54(3), 422–432.

Colwell, P. F., & Trefzger, J. W. (1992). Impact of regulation on appraisal quality. The Appraisal Journal, 60(3), 428–429.

Dietrich, J. R., Harris, M. S., & Muller, K. A., III. (2000). The reliability of investment property fair value estimates. Journal of Accounting and Economics, 30(2), 125–158.CrossRef

Gallin, J. (2006). The long-run relationship between house prices and income, evidence from local housing markets. Real Estate Economics, 34(3), 417–438.CrossRef

Gallin, J. (2008). The long-run relationship between house prices and rents. Real Estate Economics, 36(4), 635–658.CrossRef

Fernandez-Kranz, D., & Hon, M. T. (2006). A cross-section analysis of the income elasticity of housing demand in spain: is there a real estate bubble? Journal of Real Estate Finance and Economics, 32(4), 449–470.CrossRef

Gwin, C. R., & Maxam, C. L. (2002). Why do real estate appraisal nearly always equal offer price? A theoretical justification. Journal of Property Investment and Finance, 20(3), 242–253.CrossRef

Gwin, C. R., Ong, S. E., & Spieler, A. C. (2006). Real estate appraisal and transaction price: an empirical evaluation of alternative theories. Journal of Housing Research, 15(1), 29–38.

Hendershott, P. H., & Kane, E. J. (1995). Office market values during the past decade: how distorted have appraisals been? Real Estate Economics, 23(2), 101–116.CrossRef

Himmelberg, C., Mayer, C., & Sinai, T. (2005). Assessing high house prices: bubbles, fundamentals and misperceptions. Journal of Economic Perspectives, 19(4), 67–92.CrossRef

Jaffe, A. J. (1988). Toward an evolutionary theory of trade associations: the case of real estate appraisal. AREUEA Journal, 16(3), 230–256.

Jaffe, A. J. & Corgel, J. B. (1984a). Should real estate appraisers be licensed? The Real Estate Appraiser and Analyst, 50(Fall), 21–26, 32.

Jaffe, A. J., & Corgel, J. B. (1984b). Alternative forms of quality regulation in the market for appraisal services. The Real Estate Appraiser and Analyst, 50(Fall), 27–32.

LaCour-Little, M., & Malpezzi, S. (2003). Appraisal quality and residential mortgage default: evidence from alaska. Journal of Real Estate Finance and Economics, 27(2), 211–233.CrossRef

Leland, H. E. (1979). Quakes, lemons, and licensing: a theory of minimum quality standards. Journal of Political Economy, 87(6), 1328–1346.CrossRef

Leland, H. E., & Pyle, D. H. (1977). Informational asymmetries, financial structure, and financial intermediation. The Journal of Finance, 32(2), 371–387.CrossRef

Lentz, G. H., & Wang, K. (1998). Residential appraisal and the lending process: a survey of issues. Journal of Real Estate Research, 15(1/2), 11–39.

Malpezzi, S. (1999). A simple error correction model of house prices. Journal of Housing Economics, 8(1), 27–62.CrossRef

McMichael, S. L. (1936). McMichael’s appraising manual: A real estate appraising handbook for field work and advanced study courses. New York: Prentice-Hall, Inc.

Muller, K. A., III, & Reidl, E. J. (2002). External monitoring of property appraisal estimates and information asymmetry. Journal of Accounting Research, 40(3), 865–881.CrossRef

Rudolph, P. M. (1994). Will bad appraisals drive out good? The Appraisal Journal, 62, 363–366.

Rudolph, P. M. (1998). Will mandatory licensing and standards raise the quality of real estate appraisals? Some insights from agency theory. Journal of Housing Economics, 7(2), 165–179.CrossRef

Smolen, G. E., & Hambleton, D. C. (1997). Is the real estate appraiser’s role too much to expect? The Appraisal Journal, 65(1), 9–17.

Weiss, M. (2008). AP Impact: Weak Rules Cripple Appraiser Oversight. Associated Press News Service, Retrieved October 3, 2008 from Associated Press Archive. August 17.

Worzala, E. M., Lenk, M. M., & Kinnard, W. N. (1998). How client pressure affects the appraisal of residential property. The Appraisal Journal, 66(4), 416–427.

Titel: Information Producers and Valuation: Evidence from Real Estate Markets
verfasst von: David H. Downs
Z. Nuray Güner
Publikationsdatum: 01.01.2012
Verlag: Springer US
Erschienen in: The Journal of Real Estate Finance and Economics / Ausgabe 1-2/2012
Print ISSN: 0895-5638
Elektronische ISSN: 1573-045X
DOI: https://doi.org/10.1007/s11146-010-9294-8

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Wirtschaft"

Weitere Artikel der Ausgabe 1-2/2012

On the Hybrid Nature of REITs

Information Uncertainty and the Post-Earnings-Announcement Drift Anomaly: Insights from REITs

Asymmetric Information in the Subprime Mortgage Market

Developers, Herding, and Overbuilding

Distressed Properties: Valuation Bias and Accuracy

Cash Flow Volatility, Prices and Price Volatility: An Experimental Study