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

To: Tradelite who wrote (16047)	1/15/2004 1:47:27 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

However, you well know that homes are not often purchased on "expected rate of return" considerations. Right, they are making non-rational decisions. This doesn't mean that it isn't possible to discover what is rational.

To: Tradelite who wrote (16047)	1/15/2004 2:03:15 PM
From: jjs_ynot	Read Replies (1) \| Respond to of 306849

>>> It's the only method of valuation used for residential real estate -- by appraisers, ... <<< That is not correct. Appraisers have at least three methods for valuing residential real estate: Market Value Approach(Comparable Sales) , Income Approach (Investment Value), and Cost Approach (Replacement Value). In periods of significant deviation of market value from the other methods it becomes dominant since the other two don't allow real estate deals to work. HOWEVER, it has been my experience that buying when the market value approach is below the other two and not buying or selling when market value is above the other two valuations yields better return in the long run.