The Impact of Auctions on Residential Sales Prices in New Zealand

The use of an auction to sell residential real estate in the United States is often associated with distressed sales such as foreclosure, bankruptcy or estate settlement. In other areas of the world, auctions are more commonly used and viewed as a viable, preferred method of selling a house. This article uses hedonic pricing methodology to compare the sale prices of houses in Christchurch, New Zealand sold at auction with those sold by private treaty. The results indicate that in some cases auctions can result in premium sale prices. In none of the cases studied did auctions result in lower prices than private-treaty sales.

Reducing the Cost of Corporate Employee Relocation

Over 400 corporate relocation transactions from forty-one states were examined to identify factors affecting variable relocation costs. Analysis of covariance disclosed that corporate relocation costs could be significantly reduced over time by not remodeling substandard properties, fully evaluating the impact of local/regional economic conditions on market value, and adopting policies encouraging employees to purchase homes without swimming pools and homes with smaller lots.

Quantifying Estimation Bias in Residential Appraisal

The purpose of this study was to empirically test the ability of residential appraisers to estimate market value of houses. Using a sample of over 500 appraisals made for corporate relocation firms, the appraisal estimates of market value were compared with the actual price that the house sold for subsequently. The results indicate that current appraisal methods produce unbiased estimates of market value. Additional empirical results are presented that show that seasonal factors and regional economic conditions significantly explain variation in appraisal error.

An Empirical Analysis of the Reliability and Precision of the Cost Approach in Residential Appraisal

Many articles and books have discussed the limitations of the cost approach to estimate market value or real estate. This article is the first to empirically measure the predictive ability of the cost approach to estimate value of single-family houses. Three hypotheses have been tested. The results indicate that the cost approach did not provide unbiased estimates of value, and the sales comparison approach estimated value more precisely. Additionally, cost approach precision was not significantly different for newer or older properties.

The Impact of Corporate Ownership on Residential Transaction Prices

A perception exists in the appraisal and brokerage industry that houses sold by corporate relocation firms (or corporate employers) sell at a discount in the residential market. The purpose of this article is to empirically determine if corporately owned houses do sell at a discount. A sample of 278 residential transactions in one community is used in a hedonic pricing model to test the hypothesis. The results indicate that corporate properties sold at a discount of nearly 5%.

Highest and Best Use: The Evolving Paradigm

Highest and Best Use is often identified as the key concept supporting real estate use and value decisions. However, at best the concept has received ambiguous if not conflicting consideration as to its relevance in the literature of economics, finance, real estate, appraisal and other areas of study concerned with land use decisions and valuation. This paper addresses this ambiguity and identifies the theoretical premises of Highest and Best Use as employed in the various land use disciplines. The theoretical foundations as they have synthesized form the basis of a formal constrained optimization model for land use decisions. The model's logic identifies the need to include the cost of capital and location along with the physical, legal, infrastructure and market parameters discussed in the bulk of the economic and appraisal literature (including courses and professional practice). The financial and locational variables are needed in order to advance the use paradigm to fit the current context of problems facing real estate decisionmakers.Liu38_Highest_and_Best_Use.pdf: 1542 downloads, before Aug. 1, 2020