Assessment of Investor Sentiment towards Real Estate Stock in the Nigerian Capital Market

Abstract

This research examines whether most variation in house price changes is mainly driven by local or national factors. Employing a novel data containing both capital appreciation and income component in the U.S. Metropolitan Statistical Areas, results show that macroeconomic factors, absorbed by time fixed effects, account for 43% of the variation in capital gains and 2% of the variation in rental yields. Overall, the findings empirically support the prior literature assuming that the nature of housing markets is mainly local. The findings suggest a greater role of local factors for understanding cross-sectional income returns in housing markets.