Estimating the optimal market price to sell an apartment
This paper demonstrates an investment economic analysis model based on Real Option Valuation Theory applied to decision-making of individual real estate investors. The model captures the valuation of flexibilities caused by expected market trend and uncertainty and offers an optimized value for the...
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ANTAC - Associação Nacional de Tecnologia do Ambiente Construído
2018
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| Online Erişim: | https://seer.ufrgs.br/ambienteconstruido/article/view/73554 |
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ojs-article-735542019-01-08T18:43:53Z Estimating the optimal market price to sell an apartment Abreu, Carlos Alexandre Camargo de Real Options, Uncertainty, Real Estate This paper demonstrates an investment economic analysis model based on Real Option Valuation Theory applied to decision-making of individual real estate investors. The model captures the valuation of flexibilities caused by expected market trend and uncertainty and offers an optimized value for the investment opportunity. A Real Option for investment delay is used applied to the case of postponing the selling of an apartment until the estimated “best” optimal market price and option value. Application of the model is made using market data from three Brazilian major cities’ real estate market. As an important finding we have the estimation of an expanded Net Present Value for the investment when apartment selling is exercised at the optimal market price defined. It is possible to use this model to forecast what would be the optimal price and moment to sell an apartment in an investor point of view. ANTAC - Associação Nacional de Tecnologia do Ambiente Construído 2018-10-16 info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion https://seer.ufrgs.br/ambienteconstruido/article/view/73554 Ambiente Construído; v. 18, n. 4 (2018): Edição especial sobre a Cal na Construção - V Jornadas Fical; 319-327 Ambiente Construído; v. 18, n. 4 (2018): Edição especial sobre a Cal na Construção - V Jornadas Fical; 319-327 Ambiente Construído; v. 18, n. 4 (2018): Edição especial sobre a Cal na Construção - V Jornadas Fical; 319-327 1678-8621 1415-8876 eng https://seer.ufrgs.br/ambienteconstruido/article/view/73554/50114 Direitos autorais 2018 Ambiente Construído https://creativecommons.org/licenses/by/4.0 |
| institution |
Universidade Federal do Rio Grande do Sul |
| collection |
OJS |
| language |
eng |
| format |
Online |
| author |
Abreu, Carlos Alexandre Camargo de |
| spellingShingle |
Abreu, Carlos Alexandre Camargo de Estimating the optimal market price to sell an apartment |
| author_facet |
Abreu, Carlos Alexandre Camargo de |
| author_sort |
Abreu, Carlos Alexandre Camargo de |
| title |
Estimating the optimal market price to sell an apartment |
| title_short |
Estimating the optimal market price to sell an apartment |
| title_full |
Estimating the optimal market price to sell an apartment |
| title_fullStr |
Estimating the optimal market price to sell an apartment |
| title_full_unstemmed |
Estimating the optimal market price to sell an apartment |
| title_sort |
estimating the optimal market price to sell an apartment |
| description |
This paper demonstrates an investment economic analysis model based on Real Option Valuation Theory applied to decision-making of individual real estate investors. The model captures the valuation of flexibilities caused by expected market trend and uncertainty and offers an optimized value for the investment opportunity. A Real Option for investment delay is used applied to the case of postponing the selling of an apartment until the estimated “best” optimal market price and option value. Application of the model is made using market data from three Brazilian major cities’ real estate market. As an important finding we have the estimation of an expanded Net Present Value for the investment when apartment selling is exercised at the optimal market price defined. It is possible to use this model to forecast what would be the optimal price and moment to sell an apartment in an investor point of view. |
| publisher |
ANTAC - Associação Nacional de Tecnologia do Ambiente Construído |
| publishDate |
2018 |
| url |
https://seer.ufrgs.br/ambienteconstruido/article/view/73554 |
| work_keys_str_mv |
AT abreucarlosalexandrecamargode estimatingtheoptimalmarketpricetosellanapartment |
| _version_ |
1709370645637234688 |