Winter/Spring 1996

Illinois

Real Estate

Letter

"Anchoring Rights" deals with the growing popularity among American boaters of anchoring their boats outside of marinas for short or, sometimes, lengthy stays. This activity has implications for recreational boating, commercial navigation, and owners of waterfront land, as well as for government resources and the redevelopment of downtown areas.
"A Note on The Economics of Open Space" provides a response to an earlier IREL article; its authors offer an approach to allocating land to residential and open space uses based on a simple analysis of marginal costs and benefits.
"Investment Decisions: An Economic Tutorial" explains the theoretical foundations of the Net Present Value (NPV) and Internal Rate of Return (IRR) tools used as decision criteria by investors. A graphical analysis involving two time periods demonstrates that the NPV criterion is superior to the IRR criterion, because choosing a project with a higher NPV is uniformly consistent with maximizing the decision-maker's satisfaction.
"Illinois Housing Prices: An Update" supplements a previous article on our state's home values. An interesting finding is that, according to Freddie Mac data, prices of Illinois residences generally rose little during 1997, substantially trailing the home price trends observed both nationwide and in other nearby states.