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Estimating the Value of Apartment Buildings

Author

Listed:
  • James Frew

    (Willamette University, Salem, OR 97301)

  • G. Donald Jud

    (University of North Carolina-Greensboro, Greensboro, NC)

Abstract

This article applies hedonic modeling techniques to estimate the value of a sample of apartment properties sold in the greater Portland, Oregon area. An equation for value as a function of location, amenities and capitalization rate is derived. This model explains about 95% of the variation in apartment property prices. Property values decline with increasing distance from the city center. Moreover, values are shown to rise less than proportionally to increases in project size and number of units and decline with project age. But the marginal effect of project aging is small.

Suggested Citation

  • James Frew & G. Donald Jud, 2003. "Estimating the Value of Apartment Buildings," Journal of Real Estate Research, American Real Estate Society, vol. 25(1), pages 77-86.
    • Handle: RePEc:jre:issued:v:25:n:1:2003:p:77-86
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    Citations

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    Cited by:

    1. Michael Iacono & David Levinson, 2017. "Accessibility dynamics and location premia: Do land values follow accessibility changes?," Urban Studies, Urban Studies Journal Limited, vol. 54(2), pages 364-381, February.
    2. Mahdieh Yazdani & Maziar Raissi, 2023. "Real Estate Property Valuation using Self-Supervised Vision Transformers," Papers 2302.00117, arXiv.org.
    3. Mahdieh Yazdani, 2021. "House Price Determinants and Market Segmentation in Boulder, Colorado: A Hedonic Price Approach," Papers 2108.02442, arXiv.org.
    4. William G. Hardin III & Ken H. Johnson & Zhonghua Wu, 2009. "Brokerage Intermediation in the Commercial Property Market," Journal of Real Estate Research, American Real Estate Society, vol. 31(4), pages 397-420.
    5. Mahdieh Yazdani, 2021. "Machine Learning, Deep Learning, and Hedonic Methods for Real Estate Price Prediction," Papers 2110.07151, arXiv.org.
    6. Jonathan Wiley & Brandon Cline & Xudong Fu & Tian Tang, 2012. "Valuation Effects for Asset Sales," Journal of Financial Services Research, Springer;Western Finance Association, vol. 41(3), pages 103-120, June.
    7. Jun Li & Xiaoli Liang, 2020. "Beyond the Cap Rate: Valuation of Multifamily Properties," The Journal of Real Estate Finance and Economics, Springer, vol. 60(1), pages 99-110, February.
    8. John Matthews & Geoffrey Turnbull, 2007. "Neighborhood Street Layout and Property Value: The Interaction of Accessibility and Land Use Mix," The Journal of Real Estate Finance and Economics, Springer, vol. 35(2), pages 111-141, August.
    9. Renigier-Biłozor Małgorzata & Wiśniewski Radosław, 2012. "The Impact of Macroeconomic Factors on Residential Property Price Indices in Europe," Folia Oeconomica Stetinensia, Sciendo, vol. 12(2), pages 103-125, December.
    10. Beth Wilson & James Frew, 2007. "Apartment Rents and Locations in Portland, Oregon: 1992 – 2002," Journal of Real Estate Research, American Real Estate Society, vol. 29(2), pages 201-218.
    11. Paniagua-Molina Javier & Solórzano-Thompson Johanna & González-Blanco Carlos & Barboza-Navarro David, 2021. "Hedonic Price for Amenities in Rural and Urban Residential Condominiums in Costa Rica," Real Estate Management and Valuation, Sciendo, vol. 29(3), pages 52-64, September.
    12. Gary C. Cornia & Barrett A. Slade, 2005. "Property Taxation of Multifamily Housing: An Empirical Analysis of Vertical and Horizontal Equity and Assessment Methods," Journal of Real Estate Research, American Real Estate Society, vol. 27(1), pages 17-46.
    13. Julia Freybote & Hua Sun & Xi Yang, 2015. "The Impact of LEED Neighborhood Certification on Condo Prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 43(3), pages 586-608, September.
    14. Hee Jin Yang & Jihoon Song & Mack Joong Choi, 2016. "Measuring the Externality Effects of Commercial Land Use on Residential Land Value: A Case Study of Seoul," Sustainability, MDPI, vol. 8(5), pages 1-15, April.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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