The Role of People’s Expectation in the Recent US Housing Boom and Bust

Huang, MeiChi

doi:10.1007/s11146-011-9341-0

Cited by 19 publications

(12 citation statements)

References 37 publications

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“…Finance literature suggests that trading volume is positively related to volatility because of the heterogeneous beliefs of investors in the presence of informational events (Karpoff 1987). Evidence also affirms a positive relationship between volatility and return in the real estate sector (Huang 2013). Therefore, market volatility had been routinely included in early studies as a control variable to account for market-wide common information flow (see, e.g., Bessembinder et al 1996;Chuang and Lee 2006).…”

Section: Market Volatilitymentioning

confidence: 99%

Investor Overconfidence and Trading Activity in the Asia Pacific REIT Markets

Bao

2020

JRFM

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Overconfidence is one of the most robust behavioral anomalies in financial markets. By attributing investment gains to their ability, investors become overconfident and trade aggressively in subsequent periods. Evidence from stock markets shows that overconfidence leads to excessive trading and, subsequently, inferior investment performance. However, studies on overconfidence effect are lacking in the real estate sector, which is particularly true for Asia Pacific real estate investment trust (REIT) markets. Thus, this study examines the overconfidence effect in six Asia Pacific REIT markets, namely, Australia, Hong Kong, Japan, Singapore, South Korea, and Taiwan. The study finds that the overconfidence effect is more conspicuous during market boom periods or in inefficient market conditions. In addition, simulation analysis demonstrates that overconfidence could lead to rather large volumes of excessive trading activities in certain markets. Findings are robust across the alternative measures of control variables. Moreover, the policy implications of the research are also discussed.

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Section: Market Volatilitymentioning

confidence: 99%

Investor Overconfidence and Trading Activity in the Asia Pacific REIT Markets

Bao

2020

JRFM

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“…Devos et al () examine the role of institutional investors in REITs during the financial crisis and find that institutional ownership increased before the crisis but declined significantly during the crisis. Huang () investigates the role expectations played in the recent housing boom and bust through a volatility feedback model. She finds a strong positive relation between housing market volatility and expected housing returns.…”

Section: Related Literaturementioning

confidence: 99%

Speculative Trading in Reits

Blau

Whitby

2014

J of Financial Research

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The recent extremes in the real estate economic cycle have created an ideal setting to investigate the role of speculative trading. Specifically, we focus on speculative trading in real estate investment trusts (REITs) during the recent boom and bust in real estate. Although we find a strong relation between speculative trading in REITs and the economic cycle, we do not find evidence that speculative trading is related to future returns. Our results suggest that although increased speculative trading is apparent in REITs during the boom years, the level of speculative trading in REITs does not appear to affect the quality of markets at large.

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“…Devos et al (2012) examine the role of institutional investors in REITs during the financial crisis and find that institutional ownership increased before the crisis but declined significantly during the crisis. Huang (2013) investigates the role expectations played in the recent housing boom and bust through a volatility feedback model. She finds a strong positive relation between housing market volatility and expected housing returns.…”

Section: Related Literaturementioning

confidence: 99%