Liquidity of German Condominium Markets


A number of techniques for dealing with low levels of liquidity of privately traded assets, in particular real estate, have been developed in the previous chapters. They are based on the model of search for a trading partner, which allows a formal analysis of the selling or purchasing process and the resulting net receipts or expenses. Large parts of the discussion focused on the derivation of closed form solutions that could be applied in practice using data available to investors. However, most of the hitherto considerations were only theoretical. It is possible, and even probable, that in the course of their practical application to concrete problems obstacles occur that have not yet been addressed. This Chapter is intended to uncover and discuss some of such obstacles and to demonstrate possible ways of dealing with them. This is done by applying the search theoretical methodology to analyze liquidity of residential condominiums in selected German urban areas. This exemplary application should be viewed as a step toward the practical implementation of the concepts developed in this book.


Real Estate Discount Rate Reservation Price Efficient Frontier Real Estate Market 
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