The Current Body of Knowledge Paradigms Used in Real Estate Education and Issues in Need of Further Research

The ARES Body of Knowledge Committee surveyed its members in order to uncover the current state of the art in the practice of the body of knowledge (BOK) and skills that generated a series of conclusions and recommendations. One important conclusion was that the questions and issues surrounding the BOK are too large for one individual or group to address effectively and that ARES should continue to sponsor the BOK committee, BOK presentations at its annual meeting, publication of articles in the Journal of Real Estate Literature, periodic surveys, and coordination with BOK committees of other allied organizations. The BOK needs continual research and discussion before it can evolve into a final paradigm that is acceptable to all users.

New Ranking of Decision-Making Subject Areas for Corporate Real Estate Executives

This study is among the first to uncover specific concepts and skills critical to the general corporate real estate executive. The research targeted a broad range of U.S. and international corporate real estate executives in positions to know the requirements for their assignment. The results rank the three most important current subject areas critical to corporate real estate decision making as real estate market interpretation, general tools of analysis as opposed to specific tools and relationships with other personnel and the public. An additional area, lease analysis, was also found to be a part of the required concepts and skills.

US Real Estate Agent Income and Commercial/Investment Activities

This article uses canonical correlation analysis to investigate the income characteristics of active real estate agents in the United States who elected to participate in commercial and investment transactions. The model is unique in that it included activity areas to determine the specialties where agents generated the income and the type of clients who paid for the service. Future studies should consider the multiple dependent variable approach with activity areas to capture the relationship between income and the type of work involved.

A Note on the Optimal Selection and Weighting of Comparable Properties

This paper reexamines the recommendation by Vandell (1991), Gau, Lai and Wang (1992, 1994) and Green (1994) for the use of the minimum variance and coefficient of variation criteria in the optimum selection of comparables. These authors under-emphasize the typical valuation scenario that involves extremely small samples. The analyst must rank the few available comparable properties and select the "best" to carry the most weight in the final estimate of value. Rank transformation regression is suggested as one approach that can be used to extract the buying trend. The commonly taught paired-sale analysis will remain as the industry tool until more accurate estimates of value are developed with small samples.

Cancerphobia: Electromagnetic Fields and Their Impact on Residential Loan Values

This article provides a matrix representation of the adjustment grid estimator. From this representation, one can invoke the Gauss-Mrkov theorem to examine the efficiency of ordinary least squares (OLS) and the grid estimator that uses OLS estimates of the adjustments (the "plug-in" grid method). In addition, this matrix representation suggests a generalized least squares version of the grid method, labeled herin as the total grid estimator. Based on the empirical experiments, the total grid estimator outperformed the plug-in grid estimator, which in turn outperformed the OLS.

Consumer-Revealed Preferences for a Margin and Other Associated Adjustable-Rate Mortgage Features

This paper presents a model of mortgagor-revealed preferences for a margin and other associated adjustable-rate mortgage features estimated empirically from a cross-sectional sample of approved mortgage applications in the United States from 1984-87. It builds on the conclusions of others that mortgage menus create clientele effects because different contracts are designed to induce borrowers to reveal information about their preference structure. The pooled OLS model included numerous mortgage characteristics and produced statistical results that generally supported conventional wisdom concerning borrower behavior.

The Concept and Market Extraction of Effective Age for Residential Properties

This paper presents a theoretical and algebraic technique for the estimation of effective age on a residential property. This estimate for the subject property is a number that is calculated relative to the aging of the comparables. The owner's rate of aging can be compared to the rate exhibited by the comparables to determine if the subject's economic life should be equal or different to the economic life of the comparables. The analysis and technique should be of use to every residential appraiser.

The Use of Rank Transformation and Multiple Regression Analysis in Estimating Residential Property Values With A Small Sample

Conventional multiple regression analysis which has been used in estimating residential property values typically relies upon cardinal data. This paper argues that appraisal theory requires the appraiser to rank the comparables from best to worst and use a regression technique which can be applied to ordinal data. The rank regression procedure illustrated here was successfully used on small sample sizes, and did not violate the critical assumptions underlying conventional multiple regression. The results indicate that the rank regression technique illustrated here is more theoretically correct than conventional multiple regression and produces a better model with more accurate price estimates.