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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (9555)	3/12/2003 12:43:54 AM
From: Elroy Jetson	Read Replies (1) \| Respond to 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.

To: Wyätt Gwyön who wrote (9555)	3/18/2003 2:58:57 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 306849

thanks for the info, Elroy. btw, the latest GBD from Marc Faber presents some interesting stats on Australian RE. they have a chart of RE purchases as a percentage of GDP going back to the 70s or so. the peaks on the chart all correspond to RE price peaks. previous peaks were in the low 20%s, and now it's up to 32%. totally off the chart bubble. also, i have received some info on Oahu RE: * single family median price for Feb 03 was 350K, up from 312.8K in Feb 02. volume up to 269 from 242 YoY. median list price in Feb 03 was 475K up from 385K in Feb 02. listings fell from 1357 to 1212 YoY. * condo median price for Feb 03 was 167K, up from 137K in Feb 02. volume up to 433 from 329 YoY. condo median list was 190K vs 175K in Feb 02. listings fell from 1705 to 1663 YoY. what do you think? percentage gain much larger in condos on median sales price; is this a sign of ever-more-marginal buyers coming in at the tail of the bubble? or is this just the start of a bigger move up?