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Real estate investment

Real estate investment

RESEARCH METHODOLOGY

Data collection for a study evaluating the quality of postgraduate real estate teaching in the United States will focus on two primary areas: the content of real estate plans at the graduate level and the skillsets needed to succeed in the property business. Methods like surveys and questionnaires will be used in the study to collect the necessary information.

1.
Questionnaires

Several sources will be used to create the survey questionnaire that will be administered to professionals in the real estate sector. Real estate educators and specialists from across the world will be polled to determine the most pressing real estate issues taught in classrooms and online courses. To create the real estate body of information, Black and Rabianski will conduct surveys in 1998 and 1999 that explore real estate themes from a worldwide perspective. Galuppo and Worzala’s (2004) study on the establishment of a Master of Science in Real Estate program by teachers and staff at the “Burnham-Moores Centre for Real Estate at the University of San Diego” provided valuable context for the survey’s design. Callanan and McCarthy’s (2003) research, “Property education in New Zealand: Industry requirements and student views,” will also be useful in constructing the questionnaire since it will evaluate the needs of the industry and students throughout a curriculum review. These surveys will be used as templates to create a questionnaire that will be used in the research that will be done here.

2.
Property industry survey

U.S. real estate professionals will be surveyed as part of a larger effort to evaluate the quality of Master’s in Real Estate plans in the United States and elsewhere by gauging interest in and satisfaction with specific course offerings. The poll will ask professionals in the field for their thoughts on which parts of the curriculum are working well and which ones may use some tweaking to ensure they suit the needs of the sector. The drill’s end goal is to revise course materials so that they correspond with current needs in the business world. The study will be justified by the fact that most American real estate courses will be designed with input from industry professionals. Yet, there will be no actual survey of the property business conducted with actual real estate practitioners to determine what courses are needed. The study was designed to fill in some of the gaps in the literature on graduate-level real estate education in the United States.

THEORETICAL FRAMEWORK

Behavioral finance they

Bubbles theory

House price

The theory of irrational exuberance

The theory of noise traders

Figure 1

Figure 1 shows that it is possible to combine elements from each of the four hypotheses. The behavioral finance theory can also include the other three hypotheses “the bubbles theory, the irrational exuberance theory, and the noisy traders’ theory”. The three theories are intertwined in the housing market, with the behavioral money model serving as the “grandmother” of all theories relating to sentimentality examination in the real estate market and having a “several and combined influence” on home prices.

From classical to the behavioral finance theory

According to Fama (2021), an efficient market is one in which all obtainable information is reflected in pricing. The effectual market theory, Hammond (2020) underlined, is a classic financial model that incorporates the rule of pricing, which states that there is only one price for every given asset at any given moment. The equilibrium point and stability of the equilibrium point are used to assess investors’ beliefs about the market’s capacity to determine prices for assets following the theory. The classical model of money assumes that stockholders will act in a certain way to ensure that the market continues to function efficiently and follow reasonable expectations. When asset values were increasingly volatile, even to the point of generating boom and bust, skepticism about the hypothesis began to grow as time went on. This demonstrates that market activity by investors goes beyond what can be explained by pure market logic.

It became difficult to unite the concept that asset costs were the present value of all upcoming bonuses, as hypothesized by Hammond (2020), who noted that several competing hypotheses had been developed to explain the volatility in asset values. The market may be inefficient on a global scale, yet efficient on a micro-scale, It would imply either that finance got it completely wrong about what determines a stock price or that market participants aren’t wholly rational. To properly explain investor behavior in the market, a more all-encompassing theory was required. Amos Tversky, Daniel Kahneman, and Richard Thaler are widely credited with developing behavioral finance theory.

The bubbles theory

The Dutch tulip fever (1643–1647), the Spanish gold rush (1620–1643), and the American real estate bubble (1920–1929) all contributed to the development of the term “bubble.” After that point, the total amount of available credit reaches its peak, and property values continue to decline. The hypothetical appreciation in the worth of real estate possessions is the driving force behind the bubble development and subsequent chaos in the real estate market. However, Aizenman, Jinjarak, and Zheng said, “Home price bubbles are often unsustainable, and if a housing bubble busts, lending conditions would tighten owing to diminishing collateral value.”

The theory of irrational exuberance

Although the term “irrational” has been used to characterize investor sentiment in the stock market for decades, “irrational exuberance” was first used to describe this phenomenon in “December 1996 by Alan Greenspan, then-chairman of the Federal Reserve Board”. The financial markets throughout the world, including the United States, Japan, Hong Kong, and others, plunged after his speech because everyone was transfixed by his comments. Speculative market instability and the late-millennium boom that occurred between 1982 and 2000 made the expression “irrational exuberance” more well-known in the properties market, giving credence to the idea that the phrases were not just created.

The theory of noise traders

Rendering to Black, noise is what permits trade to take place in the capital market, and it is the noise that creates fluctuations in benefit values and, to a lesser degree, renders the monetary markets ineffective but prevents taking unfair compensations of the marketplace. Inflation is what it is because of unruly expectations that aren’t constrained by any reasonable norms, at least in the lack of a gold average or fixed exchange charges. Incorrectly attributing shifts in trade, investment, and economic activity to fluctuations in exchange rates and inflation rates is a common fallacy. This misconception is based on the influence of background noise in the form of doubt about what comparative fees would be with other exchange taxes. In general, investors are left in the dark because of the difficulty of testing the operation of economic or financial markets using either practical or scholarly ideas. Black (2019) stated that investors who trade mundane information on the market in the hopes of making a profit may be on to something. On the flip side, people may misunderstand noise as information and make profitable trades based on it.

References

Nguyen, T. K., Lai, C. P., Phan, H. V., & Razali, M. N. (2021). Real estate research trends and most impact real estate journals: a co-citation analysis. 
Pacific Rim Property Research Journal, 
27(1), 1-21.

Manning, C., & Roulac, S. (1999). Corporate real estate research within the academy. 
Journal of Real Estate Research, 
17(3), 265-279.

Callanan, J., & McCarthy, I. (2003). Property education in New Zealand: industry requirements and student perceptions. 
Journal of Real Estate Practice and Education, 
6(1), 23-32.

Zhao, C. F. A., & Sornette, D. (2021). Bubbles for Fama from Sornette. 
Swiss Finance Institute Research Paper, (21-94).

Barth, D., Hammond, L., & Monin, P. (2020). Leverage and risk in hedge funds. 
OFR WP, 20-02.

Kahneman, T. D., Tversky, A., & Thaler, R. Howard Raiffa, and Dan Ariely, have had key roles in influencing millions of people to recognize the importance of making better decisions and enhancing their desire and determination to do so.

Aizenman, J., Jinjarak, Y., & Zheng, H. (2019). Housing bubbles, economic growth, and institutions. 
Open Economies Review, 
30, 655-674.

Edwards, S. (2019). Real Exchange Rates in Developing Countries Concepts and Measurement1. In 
International financial markets and agricultural trade (pp. 56-108). CRC Press.