Marvin L. Wolverton

A Longitudinal Examination of the Appraisal Smoothing Hypothesis

Appraisal smoothing, the reduced variability of real estate return series, has been attributed to appraisers being influenced by their own previous value estimates. This hypothesis is tested experimentally. Expert apppraisers from Atlanta were asked to value a hypothetical apartment project in Phoenix. Eight months later, these experts were asked to update their original appraisals given certain market and property changes. At this time, an independent group of Atlanta experts was asked to appraise the property based on the updated conditions. Results support the hypothesis of insufficient adjustment from previous value judgments. Copyright American Real Estate and Urban Economics Association.

Price‐knowledge‐induced bias: a cross‐cultural comparison

Explains that bias in human problem‐solving behaviour may sometimes conflict with the assumptions that underlie normative models of valuation. Possibilities include faulty perceptions of the task, routinized valuation procedures that rely heavily on pending sale price‐knowledge and reliance on innate and distorting problem‐solving heuristics. Describes an experiment conducted with appraisers in the USA and valuers in the UK to investigate the impact of price knowledge on the process of valuation and the search and selection of comparable sales. Concludes that both appraisers and valuers can be subject to price‐knowledge bias, reflected in the choice of the less than “best” comparables and in the actual value estimate. Discusses how cultural differences in the appraisal and valuation processes, especially in the transparency of comparables adjustments, help to explain these effects.

Empirical study of the relationship between residential lot price, size and view

Real estate researchers have suggested that the law of diminishing marginal utility applies not only to consumption of property but to the characteristics of the properties consumed as well. Employs a unique data set to empirically model the functional form of the price effects of marginal additions to lot size and view. Shows that the relationships between lot price, size and view are non‐linear, and that marginal price effects diminish as lot size and view quality increase. The results imply that traditional valuation models allow only for the existence of view, rather than the quality of view, and are too simplistic and imprecise. Appraisers should be cognizant of this implication, and devise valuation techniques which allow them to consider differences in the quality of view from property to property.

A comparison of department chair tasks in Australia and the United States

Virtually every managerial book written lists and expounds upon the tasks, duties, roles and responsibilities of administrators. This paper reports a portion of the findings of the third phase of a study of Australian and U.S. academic department chairs in colleges and universities. In it, we seek to clarify how chairs in the two countries define the tasks that exemplify their role as chair. The driving question behind this inquiry is: Do academic department chairs, independent of country, define their tasks in the same way? And, if so, how might universities in both countries benefit from this knowledge?

Neighborhood Center Image and Rents

The impact of neighborhood-center image on rental rates is empirically modeled and tested. The neighborhood-center anchor does not substantially affect in-line, nonanchor rental rates and is more a proxy for a neighborhood centers trade-area economic base than an actual determinant of neighborhood-center rental rates. Image-related facilities’ specific variables do affect rental rates. Concurrently, relative center size does impact rental rates, providing marginal support for the use of gravity models at the property subtype level. More modeling of retail rents and sales activity is warranted.

Manufacturing versus Distribution: Implicit Pricing of Real Property Characteristics by Submarket

This article develops and tests the idea that the industrial real estate market is an aggregate market consisting of at least two submarkets—manufacturing and distribution. While there is no observable difference in implicit pricing of most industrial property characteristics across these two submarkets, some property-characteristic implicit prices do differ. Therefore, manufacturing and distribution submarket property-pricing functions are best estimated in aggregate, while making allowances for variability of coefficients on some property characteristics. For this sample of 331 industrial property sales from the southeastern region of the United States, the two submarkets vary with regard to implicit pricing of building volume, below-average building condition, site area, and dock-high doors.

Disaggregation of Local Apartment Markets by Unit Type

Recent market segmentation research has begun to delve into the issue of whether traditional property-type categories are sufficiently homogeneous to be modeled as aggregate real estate markets. This article extends the research on rental-property market segmentation by investigating the existence of apartment submarkets determined by unit type. The study finds that one-bedroom, one-bath units; two-bedroom, one-bath units; and two-bedroom, two-bath units function as distinct submarkets differentiated by property features, neighborhood location, and temporal changes in market rent.

Toward a Common Perception of Ethical Behavior in Real Estate

Even though an underlying commitment to morality is clearly stated in most professional real estate organization codes of ethics and most standards of practice provide detailed guidelines and rationale for proper professional conduct, these provisions are often ignored, and the common perception of unethical behavior in real estate persists. This essay examines ethics and ethical conduct in the real estate profession, going beyond rule ethics and end-point ethics into the uncharted waters of habitual behavior and integrity. The goal is to stimulate dialogue among real estate professionals about the value of striving for creation of professional real estate organizations that are self-selected by discriminating members. These sort of organizations are seen as a means to establish a common perception of ethical behavior in real estate.