The Efficiency of the Market for Single-Family Homes

Case, Karl E.; Shiller, Robert J.

doi:10.3386/w2506

“…The Federal Housing Finance Agency (FHFA) 6 provides quarterly house price indices calculated using data from Fannie Mae and Freddie Mac. The House Price Index (HPI) is a weighted average across homes with repeat sales over time (based on Case and Shiller (1989)). Because the index is calculated from changes in the prices of houses with repeat sales, it is considered a "constant quality" index.…”

Section: Methodsmentioning

confidence: 99%

House Prices and Marital Stability

Farnham

¹

,

Schmidt

²

,

Sevak

³

2011

American Economic Review

View full text Add to dashboard Cite

We investigate the effect of house price changes on MSA-level divorce rates using data for 1991-2010 from the Current Population Survey and the Federal Housing Finance Agency. Our findings suggest that changing house prices significantly affect divorce rates, and that these effects are asymmetric with respect to housing gains versus losses. In addition, we find differential effects for groups that are more likely to be homeowners versus renters. Some of this evidence is consistent with homeowners being locked into their homes by increased transactions costs in down markets.3

show abstract

“…Case and Shiller (1989) report evidence of serial correlation in qualityadjusted housing returns. If housing markets were fully efficient, then future housing returns could not be predicted based on current information.…”

Section: Literature Reviewmentioning

confidence: 99%

The Supply Side of the Housing Boom and Bust of the 2000s

Haughwout¹,

Peach²,

Sporn³

et al. 2013

Housing and the Financial Crisis

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes.You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an OpenContent Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. www.econstor.euThis paper presents preliminary findings and is being distributed to economists and other interested readers solely to stimulate discussion and elicit comments. AbstractThe boom and subsequent bust in housing construction and prices over the 2000s is widely regarded as a principal contributor to the Financial Panic of 2007 and the subsequent Great Recession. As of this writing, housing market activity remains at depressed levels as the economy slowly resolves the legacy of excess supply and sharply lower prices. Over 2.6 million foreclosures have been completed since 2008 and 1.9 million foreclosures are in process. Much has been written about the demand side of this pronounced housing cycle, in particular, the innovations in mortgage finance and the loosening of underwriting standards that greatly expanded the pool of potential homebuyers. In this paper, we take a closer look at developments on the supply side of the housing market. Following a short literature review, we begin with a descriptive review of housing production, sales, and prices at the national, regional, and state levels. We then look at developments in the homebuilding industry over this period. We also take a closer look at land markets using a quarterly price index for metropolitan statistical areas with both elastic and inelastic housing supplies across the United States. An important question is to what extent the supply side of the market contributed to the boom/bust dynamics. A second question is whether the significant changes in the industrial organization of the homebuilding industry exacerbated or ameliorated this supply impact. The boom and subsequent bust of housing construction and prices over the 2000s is widely regarded as a principal contributor to the Financial Panic of 2007 and the subsequent "Great Recession". As of this writing, housing market activity remains at depressed levels as the economy slowly resolves the legacy of excess supply and sharply lower prices. O...

show abstract

“…Using sales data for 1987 to 2009, we calculated annual weighted repeat sales price indices following the methods developed in Case and Shiller (1987) and Case and Shiller (1989). Although Case-Shiller house price indices are typically calculated using only sales of singlefamily homes, we included single-family, two-family, three-family, and condominium properties for two reasons.…”

Section: Pricesmentioning

confidence: 99%

A Profile of the Mortgage Crisis in a Low-and-Moderate-Income Community

Fisher

¹

,

Lambie‐Hanson

²

,

Willen

³

2010

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper assesses the impact of the mortgage crisis on Chelsea, Massachusetts, a low-and moderate income community of 35,000 adjacent to Boston. After years of rapid growth, house prices started falling in 2005. According to our repeat-sales indices, by the end of 2009 prices had fallen by as much as 50 percent from their peak. Foreclosures have soared and lenders have repossessed or allowed short sales on more than 330 homes, resulting in a forced exit of at least one in 30 of the town's households. A large fraction of the foreclosed properties were twoor three-family homes, so the number of households affected by the crisis undoubtedly extends beyond the number of foreclosures. But there is some positive news. After a slow start, servicers appear to have become far more efficient at selling foreclosed properties, so the stock of real estate owned properties has been falling since 2008. For the most part, homeowners who bought prior to the peak of the boom have so far avoided selling in the moribund market and thus are poised to gain if and when the market recovers. In addition, the crisis has not prevented homeowners from maintaining and improving their properties: both the number and the dollar value of building permits have held up well even for those homeowners who have bought recently and likely have negative equity in their homes. Terms of use: Documents in

show abstract

The Efficiency of the Market for Single-Family Homes

Cited by 863 publications

References 6 publications

House Prices and Marital Stability

House Prices and Marital Stability

The Supply Side of the Housing Boom and Bust of the 2000s

A Profile of the Mortgage Crisis in a Low-and-Moderate-Income Community

Contact Info

Product

Resources

About