What is it about?
Investors in real estate need asset price indices, similar to stock indices like the S&P500, to help them understand how real estate is performing over time as an investment. Such indices are hard to produce for real estate, but this article reviews how it can be, and is being, done. The article also reviews what such historical price indices tell us about the nature of real estate price dynamics over time. This can facilitate comparison with other asset classes such as stocks and bonds.
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Perspectives
I have been studying and writing about real estate investment for a quarter century, and have been involved first-hand in the development of some widely used price indexing products. In this article I try to combine my personal "wisdom" that I have gained from this experience, with an overview of the state of the art and the field as it is at this exciting time in the history of investments and asset markets.
Dr David M Geltner
Massachusetts Institute of Technology
Read the Original
This page is a summary of: Real Estate Price Indices and Price Dynamics: An Overview from an Investments Perspective, Annual Review of Financial Economics, December 2015, Annual Reviews,
DOI: 10.1146/annurev-financial-111914-041850.
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