Assessing the Value of Real Estate: Facts and MisconceptionsFrom a North American Perspective
The paper discusses sonie issues regarding the real estate market; both residential and com-mercial. Although the situation on the North American real estate market is used as a background the conclusions drawn are fully applicable to any real estate market. The paper strongly emphasizes the volatility ot" real estate and its strong dependence on interest rates. It points to the necessity of a detailed analysis of all the elements of the real estate market prior to making a purchase offer. Com- plexities of the real estate business are shown and its strong vulnerability to market slumps is empha- sized. Nonetheless the paper concludes that real estate can be an interesting investment opportunity provided crucial elements of that business are taken into account. (original abstract)
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