Price Formation, Transparency and Liquidity in the Focus of Real Estate Experts at ZEW
Conferences
To what extent do house prices depend on the prices of other properties? Why are there differences between the list price of a house and the transaction price? And how much power do project developers have in certain real estate markets? These were some of the questions discussed by international researchers of the Leibniz Network “Real Estate Markets and Capital Markets” (ReCapNet) on 8 and 9 November 2018 at the Centre for European Economic Research (ZEW) in Mannheim.
This year, the interdisciplinary ReCapNet conference celebrated its tenth anniversary with 33 guests from all over the world. The eleven presentations provided at this year’s anniversary edition focused on price formation, liquidity and transparency on the real estate market.
The real estate market is driven by the demand side
The keynote speech was given by David Geltner, professor of real estate finance at the Massachusetts Institute of Technology’s (MIT) Center for Real Estate in Cambridge, USA. In his speech, he addressed the question of how liquidity on the real estate market can be estimated in view of the different price expectations of sellers and buyers. David Geltner and his co-authors have come to the conclusion that the demand side is primarily responsible for the price development in the real estate market. This development depends on the usually unknown reservation prices – i.e. the highest price that a buyer is willing to pay and the lowest price at which a seller is willing to sell. The team has developed a new method for measuring these reservation prices and tracking price changes using two indexes. The resulting indexes, which focus on the seven major metropolitan areas in the United States, are updated on a regular basis and can be accessed publicly on the MIT Center for Real Estate’s Price Dynamics Platform.
Eleventh ReCapNet conference planned for autumn 2019
As in previous years, this year’s anniversary edition of the annual international conference of the Leibniz network “Real Estate Markets and Capital Markets” (ReCapNet) again provided its international guests in the field of real estate and financial markets research with ample opportunity to network and exchange thoughts and ideas with ZEW researchers. After ten successful years, the eleventh ReCapNet conference is scheduled to take place in autumn 2019 at ZEW.
