Real estate

Another course I'm interested in that I didn't list before is 15.021 - Real Estate Economics. My wife is a real estate agent and much like law, I've always had an interest in it. I attended the first class and I think we have another winner. Professor Bill Wheaton is knowledgeable and his explanations are relevant. He went through a bunch of slides comparing various real estate markets and drawing conclusions. I think I can learn a lot in this class, though I will only take it as a listener.

Here are a few notes I took:

- Most real estate markets have shown little gain over the last 25 years
- Within "markets" all properties move together; no cyclic trends; rising tides raises/lowers all boats; "market" = high substitutability; high mobility. Examples: Southern CA, Boston suburbs/neighborhoods, etc. So don't let a realtor tell you, for example: Back Bay property is hot, but nothing is moving in Cambridge. The trends just don't back up. All sub-markets move proportionally with each other.
- Gave an interesting trend of real estate prices in a certain part of Amsterdam for the last 375 years. The short of it is that inflation adjusted, the price is the same today it was back in 1650. He said we'll talk a lot about whether real estate is actually a good investment or whether it just keeps up with inflation.
- $500/per sq ft in DC for offices -- costs about $320 per sq ft to build
- Land value is residual
- Companies like to have offices near highways because the land is cheap