Turnover as a Measure of Demand for Existing Homes

Berkovec, James A.; Goodman, John L.

doi:10.1111/1540-6229.00698

Cited by 130 publications

(109 citation statements)

References 12 publications

Supporting

Mentioning

103

Contrasting

Order By: Relevance

“…terms, the consumer price index is employed as a de ator to create a real price series. 6 In contrast to the seasonally adjusted house price data, the volume series is provided in a seasonally unadjusted form. To avoid spurious inferences, the volume series is seasonally adjusted via application of the Census X-13 method.…”

Section: Datamentioning

confidence: 99%

Volume effects in the London housing market

Cook

Watson

2018

IJHMA

View full text Add to dashboard Cite

Purpose This paper aims to extend existing research in relation to both the importance of volume effects within housing markets and the specific behaviour of the London housing market. A detailed borough-level examination is undertaken of the relationships between volume, house prices and house price volatility. Support for alternative housing market theories, the degree of heterogeneity in house price behaviour across boroughs and the extent to which housing displays differing properties to other financial assets are examined. Design/methodology/approach Correlation analyses, causality testing and volatility modelling are undertaken in extended forms which synthesise and extend approaches within the housing, economics and finance literatures. The various modelling and testing techniques are supplemented via the use of alternative variable transformations to evaluate housing market behaviour in detail. Findings Novel findings are provided concerning both volume effects within housing markets generally and the specific properties of London housing market. Evidence concerning bubbles, the volatility-reducing effects of volume, the importance of geographical and price-related factors underlying the relationship between volume and both house price growth and volatility and the presence of asymmetric adjustment in the London housing market are all provided. The extent and nature of the support available for alternative housing market theories are evaluated. Originality/value The volatility-reducing effects of volume within housing markets, along with volume effects and the presence of asymmetric adjustment within the London housing market are examined for the first time. New empirical evidence on the support for alternative housing market theories and the differing empirical characteristics of housing relative to other financial assets are presented.

show abstract

Section: Datamentioning

confidence: 99%

Volume effects in the London housing market

Cook

Watson

2018

IJHMA

View full text Add to dashboard Cite

show abstract

“…5 We modify the classical framework in two ways. First, we add some of the insights provided by Berkovec and Goodman (1996) and allow buyers and sellers to have imperfect information about market conditions. Second, we allow the ratio of buyers and sellers in the market to affect home seller's bargaining power.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

“…Studies suggest alternative (but not necessarily mutually exclusive) explanations for such correlation including downpayment constraints (Stein 1995and Ortalo-Magne and Rady 1999, 2006, nominal loss aversion (Genesove andMayer 2001 andEngelhart 2003) and frictions in the search-and-matching process of home buyers and sellers (Berkovec and Goodman 1996, Krainer 2001and Novy-Marx 2009). Search-and-match markets where the number of buyers is large relative to the number of sellers are said to be "hot" or "tight," are expected to be more liquid, more expensive, and have higher turnover rates and sale volumes that their "cold" counterparts.…”

Section: Introductionmentioning

confidence: 99%

“…future home price appreciation. The theoretical model developed by Berkovec and Goodman (1996) suggest that changes in housing turnover precede changes in home prices. In their model, buyers and sellers have incomplete information: they observe market transactions but are uninformed about underlying market conditions.…”

Section: Introductionmentioning

confidence: 99%

“…Because it takes time to sellers to gather information and adjust their reservation values, a positive shock to buyers will lead to a sharp increase in transactions (faster sales); a gradual increase in seller's reservation values and prices will follow. We add Berkovec and Goodman (1996) insights into a simple search-andmatching model of the housing market. The matching model is similar in spirit to Novy-Marx (2009) but we allow buyers and sellers to have imperfect information about market conditions.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Can housing liquidity help forecast subsequent house price appreciation: Evidence from the US and the Netherlands

Carrillo¹,

Larson²

2012

Proceedings of the 19th Annual European Real Estate Society Conference - Edinburgh, Scotland

View full text Add to dashboard Cite

The literature has documented and rationalized a positive correlation between volume of sales and appreciation rates in the housing market. Moreover, home appreciation rates have shown to be persistent and predictable over time. In this study, we test the predictive power of variables that measure market tightness on future home prices. A stylized search-and-matching model is used to illustrate that indicators that measure market tightness, such as sale probabilities and seller's bargaining power, can be associated with future home price appreciation. The empirical analysis uses Multiple Listing Services data from the Netherlands and from Fairfax County, VA, that contain all residential units offered for sale through a real estate broker over a 15 year period. The individual records are used to construct quarterly aggregate measures of housing conditions in about 40 regions in the Netherlands and in 41 zip codes in Fairfax County. Besides home price indices, the indicators include an index that measures seller's bargaining power and the (quality adjusted) probability that a home sells in less than 2 weeks. Conventional time-series models are then used to show that observed changes in sale rates and bargaining power can significantly reduce home price appreciation forecast errors.

show abstract

Information Externalities and Home Mortgage Underwriting

Ling

Wächter

1998

Journal of Urban Economics

View full text Add to dashboard Cite

Turnover as a Measure of Demand for Existing Homes

Cited by 130 publications

References 12 publications

Volume effects in the London housing market

Volume effects in the London housing market

Can housing liquidity help forecast subsequent house price appreciation: Evidence from the US and the Netherlands

Information Externalities and Home Mortgage Underwriting

Contact Info

Product

Resources

About