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JOURNAL OF APPLIED BUSINESS AND ECONOMICS
Urban Real Estate Prices and Fair Value: The Case for U.S. Metropolitan
Areas
Author(s): Malek Lashgari
Citation: Malek Lashgari, (2010) "Urban Real Estate Prices and Fair Value: The Case for U.S. Metropolitan Areas," Journal of Applied Business and Economics, Vol. 11, Iss. 3, pp. 97 - 105
Article Type: Research paper
Publisher: North American Business Press
Abstract:
Changes in house prices in the long term, compensated for inflation, appear to follow the path of the real growth in the economy. Correlation coefficient for changes in real house prices and the real growth in the economy is 0.58 and that the real growth in the economy explains about 30 percent of the variance in changes in real house prices during 1992-2009. In particular, changes in house prices did not show any significant relationship to changes in stock prices. However, they are both significantly affected by changes in the real growth in the economy. It is further observed that market prices for real estate and common stock do not adjust for unexpected inflation.
