Economic Depreciation of Residential Real Estate: Microlevel Space and Time Analysis

Abstract

Three elements in the study of real estate depreciation that warrant further consideration are uncovered: the spatial variation of depreciation on a micro scale, the variability of depreciation within a single market across time and the recognition of land value as an influence in modeling real property prices. Taken together, these three dimensions provide an opportunity to further expand the understanding of residential economic depreciation while enhancing the predictive power of real estate market models. The analytical results, utilizing a land-value-adjusted hedonic model, indicate that both the intramarket location and the year in which the property sold have significant impacts on the observed rate of economic depreciation. Such information is vitally important to policymakers and others interested in accurate modeling of real estate markets. Copyright 2004 by the American Real Estate and Urban Economics Association

The Impact of Administrative Characteristics and Residential Types on Income Capitalization Rates in Taipei, Taiwan

“…It is expected that property age has a positive impact on income capitalization rate. The empirical results by Geltner and Fisher (2007); Smith (2004); Malpezzi et al (1987) and Cannaday and Sunderman (1986) show depreciation may present nonlinear change with an increase in property age. The age of a property and its income capitalization rate may have a nonlinear relationship, and thus the age square of property is added.…”

Connection between Residential Product Price and Preferences: A study in Jakarta Metropolitan Region

“…They suggested that there are three major factors that contribute to residential consumer purchasing decision: Lifestyle, Prestige, and Security. After their research, number of studies in residential consumer preference has increased with wider perspective, including the research by Daly (2003) discussing the importance of consumer perception in valuation of residential products; pricing of residential product versus the building age (Smith, 2004); planned versus non-planned community development (Eves, 2006); study about residential consumer heterogeneity behavior by Hoshino (2008); and study made by Davison et al (2009) who discussed about the property developer brand and price which affects the consumer preference, From the following research above we can see that there are several factor that affecting consumer preference when they decided to purchase a property product. Factors such as design, planned development and prestige play significant part in price setting in Indonesia.…”

Transformations of Industrial Heritage: Insights into External Effects on House Prices

“…There is a large stream of literature investigating the depreciation (and renewal) of urban areas (e.g. Brueckner & Rosenthal, 2009;Coulson & Bond, 1990;Harding et al, 2007;Rosenthal, 2008;Smith, 2004). Abandoned industrial sites are often large and may well have a negative impact on the neighborhoods in which they are located and become a disamenity for the nearby residential areas.…”