Modern portfolio theory is increasingly being used to guide real estate portfolio decisions. However, to obtain meaningful results from complex mathematical techniques, the input data must meet at least two conditions: property values must be measured accurately, and the process by which...

Real metropolitan house prices have been quite volatile during the 1977-91 period, with half of our 30 areas having annual increases of above 15 percent in a single year and a third having decreases greater than 7.5 percent. Drawing on Capozza and Helsley's models of real land prices, we express...