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Can list prices accurately capture housing price trends? Insights from extreme markets conditions

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  • Lyons, Ronan C.

Abstract

Housing matters but measuring housing prices is not straightforward. Using population-level datasets of listings and mortgage drawdowns for the Irish housing market 2006–2012, and a novel decomposition of the gap between the two, I examine whether listings accurately capture sale price trends, even in volatile market conditions. I find that, accounting for time-to-sell, an index based on listed prices is a very accurate barometer of, and lead indicator for, true transaction prices. With current and historical listings readily available online, the findings are very relevant for both academics and policymakers interested in measuring and understanding living costs and wealth trends.

Suggested Citation

  • Lyons, Ronan C., 2019. "Can list prices accurately capture housing price trends? Insights from extreme markets conditions," Finance Research Letters, Elsevier, vol. 30(C), pages 228-232.
    • Handle: RePEc:eee:finlet:v:30:y:2019:i:c:p:228-232
    DOI: 10.1016/j.frl.2018.10.004
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    References listed on IDEAS

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    1. Kennedy, Gerard & McIndoe-Calder, Tara, 2012. "The Irish Mortgage Market: Stylised Facts, Negative Equity and Arrears," Quarterly Bulletin Articles, Central Bank of Ireland, pages 85-108, February.
    2. John R. Knight & C. F. Sirmans & Geoffrey K. Turnbull, 1994. "List price signaling and buyer behavior in the housing market," Proceedings, Federal Reserve Bank of Philadelphia, pages 177-195.
    3. Francis E Warnock & Veronica Cacdac Warnock, 2012. "Developing Housing Finance Systems," RBA Annual Conference Volume (Discontinued), in: Alexandra Heath & Frank Packer & Callan Windsor (ed.),Property Markets and Financial Stability, Reserve Bank of Australia.
    4. Bank for International Settlements, 2012. "Property markets and financial stability," BIS Papers, Bank for International Settlements, number 64.
    5. Darren K. Hayunga & R. Kelley Pace, 2017. "List Prices in the US Housing Market," The Journal of Real Estate Finance and Economics, Springer, vol. 55(2), pages 155-184, August.
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    Cited by:

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    4. Ahlfeldt, Gabriel M. & Heblich, Stephan & Seidel, Tobias, 2023. "Micro-geographic property price and rent indices," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    5. Tom Gillespie & Ronan C. Lyons & Thomas K. J. McDermott, 2020. "Information Matters: Evidence from flood risk in the Irish housing market," Trinity Economics Papers tep1620, Trinity College Dublin, Department of Economics.
    6. Francisco Amaral & Martin Dohmen & Moritz Schularick & Jonas Zdrzalek, 2023. "German Real Estate Index (GREIX)," ECONtribute Discussion Papers Series 231, University of Bonn and University of Cologne, Germany.
    7. Chen, Jie & Chen, Yu & Hill, Robert J. & Hu, Pei, 2022. "The user cost of housing and the price-rent ratio in Shanghai," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    8. Breidenbach, Philipp & Jäger, Philipp & Taruttis, Lisa, 2022. "Aging and real estate prices in Germany," Ruhr Economic Papers 953, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    9. Maria-Francisca Cespedes-Lopez & Raul-Tomas Mora-Garcia, 2022. "Are Cave Houses a Sustainable Real Estate Alternative?," Land, MDPI, vol. 11(12), pages 1-17, December.
    10. Robert J. Hill & Norbert Pfeifer & Miriam Steurer & Radoslaw Trojanek, 2021. "Warning: Some Transaction Prices can be Detrimental to your House Price Index," Graz Economics Papers 2021-11, University of Graz, Department of Economics.
    11. Richard Keely & Ronan C. Lyons, 2022. "Housing Prices, Yields and Credit Conditions in Dublin since 1945," The Journal of Real Estate Finance and Economics, Springer, vol. 64(3), pages 404-439, April.

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