scholarly journals Das Ende der Immobilienblase in den USA

2007 ◽  
Vol 37 (146) ◽  
pp. 129-137 ◽  
Author(s):  
Trevor Evans
Keyword(s):  
House Prices ◽  
House Price ◽  
Consumer Spending ◽  
Corporate Sector ◽  
Economic Expansion ◽  
Price Boom ◽  
The Us ◽  
Current Record

The US economic expansion which began in 2002 has been strongly driven by consumer spending financed by borrowing against sharply rising house prices. But the house-price boom came to an end in early 2006, raising fears of a new recession. Until now, house prices have stopped rising rather than actually falling, and higher employment and earnings are helping to prevent a collapse of consumption. But as earnings begin to rise, the corporate sector might find it difficult to sustain the current record levels of profitability, and if it responds by cutting back investment, this could signal the end of the current expansion.

scholarly journals Money and credit during normal times and house price booms: evidence from time-frequency analysis

Empirica ◽  
2019 ◽  
Vol 47 (4) ◽  
pp. 835-861
Author(s):  
Maciej Ryczkowski
Keyword(s):  
Great Recession ◽  
House Prices ◽  
House Price ◽  
Industrialized Countries ◽  
Time Frequency ◽  
The Great Recession ◽  
Time Period ◽  
Price Boom ◽  
The Us ◽  
Short Run

Abstract I analyse the link between money and credit for twelve industrialized countries in the time period from 1970 to 2016. The euro area and Commonwealth Countries have rather strong co-movements between money and credit at longer frequencies. Denmark and Switzerland show weak and episodic effects. Scandinavian countries and the US are somewhere in between. I find strong and significant longer run co-movements especially around booming house prices for all of the sample countries. The analysis suggests the expansionary policy that cleans up after the burst of a bubble may exacerbate the risk of a new house price boom. The interrelation is hidden in the short run, because the co-movements are then rarely statistically significant. According to the wavelet evidence, developments of money and credit since the Great Recession or their decoupling in Japan suggest that it is more appropriate to examine the two variables separately in some circumstances.

High house prices may be global systemic risk

2016 ◽  
Keyword(s):  
Interest Rates ◽  
Household Income ◽  
House Prices ◽  
House Price ◽  
Content Type ◽  
Price Boom ◽  
Advanced Economies ◽  
The Us ◽  
Property Markets

Subject The rise in global house prices. Significance In the first quarter of 2015, the global house price index, aggregating prices in 52 countries, was at about the same level as in early 2007, according to IMF data. This recovery has occurred in a period of wage gains in most emerging markets (EMs), but little or no growth in household income across most advanced economies. Living costs excluding housing have stagnated and interest rates have been exceptionally low. Yet US interest rates are rising now and global prices are unlikely to keep falling beyond 2016, while many EMs have slumped into recession. As households are hit by more adverse trends, property markets and the related sectors will be affected. Impacts The EM house price boom will be curbed by slowing income growth and weaker economic prospects. High house-prices-to-household-income ratios and household debt might require the introduction of macroprudential tools. The US housing market will stay affordable compared to its long-term average and to Europe's.

scholarly journals A dynamic model for housing price spillovers with an evidence from the US and the UK markets

2018 ◽  
Vol 2 (1) ◽  
pp. 70-81 ◽  
Author(s):  
Alper Ozun ◽  
Hasan Murat Ertugrul ◽  
Yener Coskun
Keyword(s):  
New York ◽  
Real Estate ◽  
House Prices ◽  
Housing Prices ◽  
House Price ◽  
Housing Markets ◽  
Content Type ◽  
Real Estate Markets ◽  
Country Level ◽  
The Us

Purpose The purpose of this paper is to introduce an empirical model for house price spillovers between real estate markets. The model is presented by using data from the US-UK and London-New York housing markets over a period of 1975Q1-2016Q1 by employing both static and dynamic methodologies. Design/methodology/approach The research analyzes long-run static and dynamic spillover elasticity coefficients by employing three methods, namely, autoregressive distributed lag, the fully modified ordinary least square and dynamic ordinary least squares estimator under a Kalman filter approach. The empirical method also investigates dynamic correlation between the house prices by employing the dynamic control correlation method. Findings The paper shows how a dynamic spillover pricing analysis can be applied between real estate markets. On the empirical side, the results show that country-level causality in housing prices is running from the USA to UK, whereas city-level causality is running from London to New York. The model outcomes suggest that real estate portfolios involving US and UK assets require a dynamic risk management approach. Research limitations/implications One of the findings is that the dynamic conditional correlation between the US and the UK housing prices is broken during the crisis period. The paper does not discuss the reasons for that break, which requires further empirical tests by applying Markov switching regime shifts. The timing of the causality between the house prices is not empirically tested. It can be examined empirically by applying methods such as wavelets. Practical implications The authors observed a unidirectional causality from London to New York house prices, which is opposite to the aggregate country-level causality direction. This supports London’s specific power in the real estate markets. London has a leading role in the global urban economies residential housing markets and the behavior of its housing prices has a statistically significant causality impact on the house prices of New York City. Social implications The house price co-integration observed in this research at both country and city levels should be interpreted as a continuity of real estate and financial integration in practice. Originality/value The paper is the first research which applies a dynamic spillover analysis to examine the causality between housing prices in real estate markets. It also provides a long-term empirical evidence for a dynamic causal relationship for the global housing markets.

Policy will cut the risk of booming house prices

2021 ◽  
Keyword(s):  
Financial Stability ◽  
House Prices ◽  
House Price ◽  
Central Banks ◽  
Price Inflation ◽  
Content Type ◽  
Reserve Bank ◽  
Mortgage Backed Securities ◽  
The Us ◽  
The Government

Significance The government in New Zealand, where the market is particularly buoyant, was the first to react in February. It now requires the Reserve Bank to consider house prices when setting monetary policy. Other governments and central banks have shown little sign of following suit. Impacts Calls are rising for the US Federal Reserve to taper its purchases of mortgage-backed securities, but it will remain cautious. Rising financial stability risks and house price booms increase the risk of insolvency for borrowers and non-performing-loans for banks. Higher house prices add indirectly to consumer price inflation if they push up rents, but this link takes time to materialise.

scholarly journals No Price Like Home: Global House Prices, 1870–2012

2017 ◽  
Vol 107 (2) ◽  
pp. 331-353 ◽  
Author(s):  
Katharina Knoll ◽  
Moritz Schularick ◽  
Thomas Steger
Keyword(s):  
Twentieth Century ◽  
World War Ii ◽  
House Prices ◽  
House Price ◽  
World War ◽  
Land Prices ◽  
Long Run ◽  
Price Boom ◽  
Advanced Economies ◽  
Cross Country

How have house prices evolved over the long run? This paper presents annual house prices for 14 advanced economies since 1870. We show that real house prices stayed constant from the nineteenth to the mid-twentieth century, but rose strongly and with substantial cross-country variation in the second half of the twentieth century. Land prices, not replacement costs, are the key to understanding the trajectory of house prices. Rising land prices explain about 80 percent of the global house price boom that has taken place since World War II. Our findings have implications for the evolution of wealth-to-income ratios, the growth effects of agglomeration, and the price elasticity of housing supply. (JEL C43, N10, N90, R31)

scholarly journals House Price Appreciation: The Impact Of No Income Verification Loans And Investor Activity

2011 ◽  
Vol 9 (6) ◽  
pp. 51 ◽  
Author(s):  
Lynne Kelly
Keyword(s):  
House Prices ◽  
House Price ◽  
Washington Dc ◽  
Cross Sectional ◽  
The Us ◽  
Price Appreciation ◽  
Boom And Bust ◽  
Price Movements ◽  
Boom And Bust Cycle ◽  
The Impact

This paper examines house price appreciation in the US from 2004 through 2009, a period marked by a boom-and-bust cycle for house prices, to investigate the impact of the extensive use of no income verification loans and investor activity on house price movements. House price appreciation for each state and Washington, DC is modeled in cross-sectional time series regressions using macroeconomic variables and loan type intensities. The findings suggest that widespread use of no income verification loans and non-owner occupied loans directly impacts house price movements and significantly explains the astonishing gains and sudden losses that occurred during the sample period.

scholarly journals How Does COVID-19 Affect House Prices? A Cross-City Analysis

2021 ◽  
Vol 14 (2) ◽  
pp. 47
Author(s):  
Bingbing Wang
Keyword(s):  
House Prices ◽  
House Price ◽  
Service Industries ◽  
Difference In Differences ◽  
Transaction Data ◽  
Individual Level ◽  
Des Moines ◽  
Price Effects ◽  
The Us ◽  
Market Fundamentals

Using individual level transaction data and a revised difference-in-differences method with nonparametric smoothing, we study the effect of COVID-19 on house prices. The analyses are performed on the areas of Houston, Santa Clara, Honolulu, Irvine, and Des Moines in the US, which vary in the economic features and the implementation of stay home orders. The results show that only Honolulu experienced noticeable house price declines from the outbreak, suggesting that a heavier reliance on service industries might be correlated with higher vulnerabilities. Santa Clara and Irvine lead the house price increase rates, followed by Des Moines and Houston, indicating that stronger housing market fundamentals, better amenities and less dependence on service industries are associated with more positive house price effects.

scholarly journals Forty years of real-estate bubbles in the US and the macroeconomy: a Keynesian perspective

2019 ◽  
Vol 16 (3) ◽  
pp. 381-402
Author(s):  
Herbert Walther
Keyword(s):  
Real Estate ◽  
Banking Sector ◽  
House Prices ◽  
Asset Price ◽  
House Price ◽  
Price Volatility ◽  
Asset Price Bubbles ◽  
Us Economy ◽  
Real Estate Sector ◽  
The Us

This paper presents a dynamic, non-linear, stock–flow consistent aggregate Keynesian model with a banking sector, a household sector, a government sector, and a real-estate sector, to study the interactions between booms and busts in the real-estate sector and the macroeconomy. Using this model we try to simulate some ‘stylized facts’ about the US economy observable during the last four decades. It is argued that for various reasons house-price volatility in the US has increased since the 1980s: house prices seem to have followed a ‘cobweb’ pattern of accelerating instability, leading to the climax of the financial crises in 2007/2008. A new run-up of house prices has already started, pointing towards a looming bubble ahead. The US economy seems to have become addicted to asset-price bubbles as the driving force of the business cycle. It is argued that various institutional changes, which can be linked to the dominant economic ideology, are responsible for these developments.

Revisiting the Link between House Prices and Monetary Policy

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Shiu-Sheng Chen ◽  
Tzu-Yu Lin
Keyword(s):  
South Africa ◽  
Monetary Policy ◽  
Interest Rate ◽  
The Netherlands ◽  
House Prices ◽  
House Price ◽  
Monetary Policy Shocks ◽  
The Us ◽  
Policy Shocks ◽  
Interest Rate Shock

Abstract This paper revisits the link between house prices and monetary policy using a data set on house prices provided by the Bank for International Settlements. It is found that a loose monetary policy unambiguously results in a rise in real house prices, and such an increase is statistically significant for 19 of the 20 countries studied here. Empirical results also show that for some countries (Belgium, Canada, Switzerland, Denmark, the Netherlands, Sweden, and South Africa), the interest rate shock can explain a large percentage of real house price movements. The response of house prices to monetary policy shocks varies between countries, and the strength of the relationship between house prices and monetary policy can be associated with financial liberalization. On the other hand, evidence shows that interest rate shock plays an important role in explaining recent house price hikes for Australia, Spain, Ireland, the Netherlands, the US, and South Africa. In particular, during 2002–2006, on average 24% of the house price hikes in the US can be attributed to monetary policy shocks. Finally, we also find evidence that central banks react to the housing market, particularly in those countries adopting a policy of inflation targeting.

scholarly journals A Lost Generation? Education Decisions and Employment Outcomes during the US Housing Boom-Bust Cycle of the 2000s

2016 ◽  
Vol 106 (5) ◽  
pp. 630-635 ◽  
Author(s):  
Luc Laeven ◽  
Alexander Popov
Keyword(s):  
Higher Education ◽  
House Prices ◽  
House Price ◽  
Lost Generation ◽  
Skill Formation ◽  
Education Decisions ◽  
The Us ◽  
Housing Boom ◽  
Education And Employment ◽  
The Impact

We exploit regional variations in U.S. house price fluctuations during the boom-bust cycle of the 2000s to study the impact of the housing cycle on young Americans' choices related to education and employment. We find that in MSAs which experienced large increases in house prices between 2001 and 2006, young adults were substantially more likely to forego a higher education and join the workforce, lowering skill formation. During the bust years, the young, especially those without higher education, were more likely to be unemployed in areas which experienced higher declines in house prices.

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