A. Valenti

Forms and Functions of the Real Estate Market of Palermo (Italy). Science and Knowledge in the Cluster Analysis Approach

The analysis of the housing market of a city requires suitable approaches and tools, such as data mining models, to represent its complexity which derives on many elements, e.g. the type of capital asset-house is a common good and an investment good as well, the heterogeneity of the urban areas—each of them has own historical and representative values and different urban functions—and the variability of building quality. The housing market of the most densely populated area of Palermo (Italy), corresponding to ten districts, is analyzed to verify the degree of its inner homogeneity and the relations between the quality of the characteristics and the price of the properties. Five hundred sets of housing data have been collected and elaborated by cluster analysis with the aim of describing the structure of the housing market in each district and developing operational tools for the implementation of urban policies and public-private investments.

Decision Trees Analysis in a Low Tension Real Estate Market: The Case of Troina (Italy)

Troina is a town in the central mountainous area of Sicily, in the Province of Enna, and well represents the general social and economic profile of this territory. Its real estate market is assumed in this study as one of the most significant ones for the description of this profile, because of its characteristics that, especially during the current economic-financial crisis, are particularly evident. The study of this market has been carried out as a basis for a possible redevelopment capital-centered policy, so that both urban/architectural and real estate characteristics have been considered within the proposed pattern. This pattern is based on the decision trees technique, a data mining procedure that allows defining the different submarkets under some specified hypotheses. The different aggregations we have figured out express different ways of assuming the real estate market profile and the directions of any policy that could boost the preservation of the historical urban context instead of promoting the outward urban spreading with further land consumption.

Clustering Analysis in a Complex Real Estate Market: The Case of Ortigia (Italy)

Ortigia, the historic center of Syracuse, is a complex urban entity characterized by high outer homogeneity and inner heterogeneity. The evolution of its real estate market during the last decade is somehow related to the global property market one. In addition its events are connected with the evolution of the exploiting policies still ongoing. The critical observations of its features aim at providing tools able to support the decisions about subsides and local property taxes. This study continues the observations we have carried out for five years, this time involving clustering analysis, a data mining technique able to recognize different submarkets, and suitable to make the valuation pattern fit to the different market areas. For each of the latter significant characteristics have been recognized with reference to the “monetary declination” of these particular capital assets.

Cap Rate and the Historic City. Past and Future of the Real Estate of Noto (Italy)

A real estate market survey has been carried out within the old town of Noto, in order to describe the progressive increase of the property market prices performed in the last decade. A sample of 56 properties was analyzed by considering a large amount of characteristics grouped in a frame of five main features progressively detailed. Due to the architectural, historical and landscape performances of this urban-land context, many expectations influence prices and the kind of and exploitation of these properties, so that a further study concerning the costs of renovation, the rents and cap rates of the surveyed properties has been carried out in order to identify the economic, financial and monetary profile of each of them and some recursive rules for investments’ layout. A multi-layer clustering analysis was carried out to integrate two approaches, the empirical one sorting by characteristics, the analytic one based on the scored attributes.

The Paradox of High Prices and High Vacancy Rates in U.S. Housing Markets

Housing markets in the United States continue to adjust from the effects ofa housing bubble, its collapse, and the slow recovery from that collapse.This paper will employ data at the tract level from the American CommunitySurvey for the 383 Metropolitan Statistical Areas of the United States. Theresearch finds that both the market for owner-occupants and the market forrenters experienced growth of the supply of units that outpaced the demandfor those units. The problem of excessive supply has abated somewhat inthe last five years, but the problems of surplus housing continue to be aproblem for most markets. Vacancy rates remain at high, perhapsunhealthy, levels. There is a paradox in the market in that, despitesurpluses of housing, prices continue to rise faster than inflation and fasterthan the incomes of the households. With prices rising faster than incomes,housing affordability problems are expanding. The problems of high vacancyrates varies widely across the metropolitan areas of the nation and acrossthe various submarkets of housing defined by price strata. Most marketssuffer from shortages only in rental markets at the lowest price levels. Theprocess of filtering non-viable units out of the system does not appear to beworking well. Vacancy rates are above optimal levels in most neighborhoodsbut are highest in the most distressed neighborhoods. These marketdynamics call into question some of the policies and programs of the federalgovernment which seek to expand the supply of low-cost rental housingwhen many of these markets are in surplus.