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Forecasting Dynamic Investment Timing under the Cyclic Behavior in Real Estate

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Author Info
Changha Jin () (Department of Real Estate, J. Mack Robinson College of Business, Georgia State University, P.O. Box 4020, Atlanta, Georgia 30302-4020)
Terry V. Grissom () (School of the Built Environment, The University of Ulster, Jordanstown Campus, Shore Road, Newtownabbey Co. Antrim. UK BT 37)
Abstract

This paper applies the Hodrck-Prescott (HP) filter to forecast short-term residential real estate prices under cyclical movements. We separate the trend component from the cyclical component. We show that each regional residential market reacts not only to previous price movements, but also that these regional markets react to previous shocks under Auto Regressive Integrated Moving Average (ARIMA) modeling. Using the S&P Case-Shiller Home Price Index, we compare our forecast to index values from the Chicago Mercantile Exchange (CME) Housing Futures and Options. Our study identifies possible systematic errors from the different price adjustments reflecting current market situations.

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Publisher Info
Article provided by Asian Real Estate Society in its journal International Real Estate Review.

Volume (Year): 11 (2008)
Issue (Month): 2 ()
Pages: 105-125
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ire:issued:v:11:n:02:2008:p:105-125

Contact details of provider:
Postal: Asia Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
Email:
Web page: http://www.asres.org/

Order Information:
Postal: Asian Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
Email:
Web: http://www.asres.org/

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Related research
Keywords: Real estate investment; Real estate cycle; residential housing futures contract; Real estate risk hedging;

Find related papers by JEL classification:
L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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This page was last updated on 2009-12-3.


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