The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Wyätt Gwyön who wrote (9555)	3/12/2003 12:43:54 AM
From: Elroy Jetson	Read Replies (1) of 306849

P/E valuation of homes - Forbes had an article which looked at this view of valuation in June of 2002. forbes.com The p/e ratio for real estate is more or less the same as the "Gross Rent Multiplier" or the inverse of the "Cap Rate". You can easily find out what this is in your area for residential income properties. Of course the leveraged p/e ratio will be different. Single family homes normally sell at a much higher p/e ratio, due to the generous government subsidies which home ownership attracts. Determining the true p/e ratio of single family homes is also more difficult as in most areas very few of them are rented.

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