The same factors that determine the current market price of a property also determine the price of a future investor will pay for that property. Previous researchers had no means available to endogenize future resale prices and future optimal holding periods. Using dynamic programming, we simultaneously determine both a price path and the corresponding optimal holding periods for all owners during the economic life of an income‐producing property. The model can be extended to the problem of estimating real rent patterns from observed patterns of used property prices.
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Ling et al. (1985) studied this question.
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