Tài liệu Real Estate Economics and Finance pdf

Spring 2005
Real Estate Economics and Finance
Real Estate Economics and Finance
Starring Erik Hurst

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In the Beginning, there was land …...
Why Should We Study Real Estate?
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Real estate is an asset
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If we take finance classes, don’t we know how to price this or any asset?
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The answer: Not Exactly
Real Estate is different in many respects from stocks and bonds in regards to its:
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Function
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Size (which creates different financing options)
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The asset structure itself (the real option)
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Institutions

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Differences in Function
Real Estate has multiple functions
1. Consumption:
Real Estate is Used as Shelter (a place to live)
Real Estate is Used as “Great Outdoors”
2. Production:

Real Estate is Used as a Direct Input into Production (vineyard)
Real Estate is Used as an Indirect Input into Production (place to
build the factory).
3. Asset:
Real Estate gives expected returns to those who own the assets or
liabilities.