Book Review

Real Estate Valuation in Global Markets (Second Edition)
By Howard C. Gelbtuch, MAI, with Eunice H. Park

Soft Cover; 618 Pages $75.00
Appraisal Institute
550 W. Van Buren, St
Chicago, Il 60607
312 355-4140

The author's note in the introduction spells out the purpose of this book: “The world has changed since the first edition was published more than a dozen years age." The book would be overwhelming if it were not divided up into separate chapters for each of the 47 countries covered. In effect, there are more than 47 other authors besides the two named on the cover. Having "been there and done that", I suspect getting the material each author supplied in a timely manner was a daunting task.

My knowledge of international real estate is limited to just a handful of countries. In 1993, I was invited by the World Bank to join a group of appraisers from all over the world to visit Russia. Our goal was to meet with members of the newly-formed Russian Society of Appraisers and representatives of the Russian government to explore how to jump start the newly formed Russian appraisal profession. The need for appraisers became apparent during the phase of rapid privatization of real property in the mid-1990s in Russia. The immediate need was to train appraisers who could make appraisals that would satisfy international lenders trying to make mortgages in Russia. As a result of this meeting, I wrote the first appraisal textbook which was translated into Russian to be used to train instructors, who would in turn train the hundreds of needed appraisers. I traveled back to Russia several times to run training programs for these instructors between 1994 and 1996.

With this personal background, I started this book review by reading the chapter on real estate in Russia. I found that it was well organized and very informative. I particularly liked Exhibit 2: "Achievements and Challenges Related to Property Issues", which is a snapshot of how Russian real estate differs from real estate in the USA and many other countries.

Having just returned from an extensive trip to China, I next read the China section. While in China, I witnessed the incredible building boom the country is experiencing, primarily in the construction of high rise apartment houses in the cities. When our bus drove through Chongqing, a city of 30 million people and the capital of Chongqing Province that was also the capital of China during WWII and the headquarters of the famous Flying Tigers, we counted over 150 high rise apartment building — each between 20 and 40 stories high — under construction. While we were there, the government announced they were limiting the number of units a family could own to only one in order to try to curb the housing price inflation. Our tour guide was upset, as her family already owns three apartments in Beijing, and were planning to invest in more. I thought I was back in the USA during the recent housing bubble! An interesting thing about Chinese appraisals is the use of factors for adjustment. When I first started in appraising in the 1960s, this was a very common practice which has fallen out of favor in the USA.

Next, I looked up Israel because we lived in Israel for a month in 1982, when I wrote my book “Appraising Residences and Income Properties”. More recently, I took our whole family (14 members) there in December 2009 for a wonderful two week trip. The chapter entitled "Appraising in Israel" dwells a lot on the crazy inflation that Israel had for many years. However, it has been under control for over 10 years, and its importance seems to me to be overemphasized in this chapter, as I don’t think it weighs heavily on current market reactions and appraising in Israel.

My final thought is that if you want to check out this book before you buy it, you can probably get it on loan from the Institute’s Lum Library. Their address is: 550 W. Van Buren St., Suite 1000, Chicago, IL 60607 - phone: (312) 335-4100. I know it is going to take me some time, but I do intend to read the whole book. With the upheaval now going on in the Mid-East it is interesting to know a little about real estate appraising in those countries and how it might change with a change in government.

This is a fine reference book. One of the important functions of the Appraisal Institute is that they publish a wide variety of appraisal books, many of which I am sure make no money. Sad to say they are the only organization in the industry doing this and they get little recognition for how much this helps all appraisers obtain recognition as professionals.

When you read about how good appraising is in many other countries, you may even consider relocating! If I was still appraising and free to relocate, I think my first choice would be Sydney, Australia. That has to be the best place for small boat sailing in the world.