The only reason these capitalization ratios are sustainable is if there is a lot of home
value appreciation expectation, appreciation above and beyond inflation that is.
Not exact matches
More importantly, they process and interpret information in the same was as speculators and rather than act to stabilize prices (by buying for
value when prices decline), they tend to enhance volatility by reinforcing
appreciation and depreciation
expectations.
In contrast, if you buy a 10 % grower at intrinsic
value, your long - term capital
appreciation expectation should be 10 %, plus dividends as above.
However, after acclimatizing to these new
expectations, savvy lawyers will come to understand that allowing clients a «window» into the details that must be managed in closing a real estate deal can promote an
appreciation of the work involved and of the
value those clients are receiving for their money.
This is quite unlike the behavior or some traditional assets, such as stocks, which have very well defined
value characteristics (dividends and price
appreciation, arising out of
expectations of future cash flows generated by a firm).