This paper develops a stylized model to provide a rational explanation for the boom-and-bust price movement pattern that we frequently observe in the real world. Our stylized model indicates that there are three conditions to form a boom-and-bust price pattern in a community: a move-in of high...

We set up a game-theoretic model for a market where the presale method (to sell a property before its completion) can be used together with construction loans and mortgages as a developer's financing tools for project developments. This model captures the interactions and dynamics among four...

This paper provides a first look at estimates of the price elasticity of housing supply in China at both the national and city levels. Using a panel dataset consisting of 35 cities in China from 1998 to 2009, we find the implied national price elasticity of housing supply to be between 2.8 and...

This paper builds a model to provide a complementary explanation to the well-known IPO pricing puzzle. Unlike existing theories in the field, our model does not assume that one agent (issuer, underwriter, informed investor, or uninformed investor) has superior information over another, nor that...

It has been documented that institutional investors did not participate actively in the real estate investment trust (REIT) stock market prior to 1990 and that the percentage of institutional holdings of a REIT stock is positively correlated with the performance of the REIT stock. This article...

Gyourko and Keim (1993) point out that the continued growth of the Real Estate Investment Trust (REIT) market depends critically on the stock market's ability to provide fair and accurate valuations of real estate. Given the recent surge of REIT initial public offerings (more than $15 billion in...

In performing a Discounted Cash Flow Analysis for an income-producing property, a traditional rule-of-thumb indicates that the going-out capitalization rate should be one-half to one percent higher than the going-in capitalization rate. So far, there has been no theoretical model or empirical...

This paper develops an optimal portfolio selection technique when short sales on real estate assets are restricted. Using the well-known mean-variance efficient concept, we are able to derive the optimal weights for portfolios consisting of both financial assets and real estate assets. Our paper...

This study examines the impact of intra-project externalities and layout variables on the selling prices of 897 condominium units in the cities of Irvine and Santa Ana in Orange County, California. It documents that, at a micro-level, proximity to intra-project externalities such as greenspace,...

This study explores the impacts a presale contract has on a developer’s pricing and production decisions in a game-theoretical framework. In an environment where developers have full capital market access, we find that both developers and buyers are indifferent between a presale and a...