Forecasting Sales and Price for Existing Single-Family Homes: A VAR Model with Error Correction
AbstractIn this paper we forecast demand for existing single-family housing in the United States. We first find that sales volume (sales) and median sales price (price) have unit roots. We then find that sales and price are cointegrated. We develop a vector autoregressive (VAR) model with error correction to further examine the causality between sales and price. We find that there exists a bidirectional causality relationship between sales and price. Price affects sales significantly and sales affects price weakly. With the VAR model we then forecast sales and price for existing single-family housing during the period 1991 to 1994 by using a recursive method. We find that our predictions for sales and price fit the actual data well.
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Bibliographic InfoArticle provided by American Real Estate Society in its journal Journal of Real Estate Research.
Volume (Year): 14 (1997)
Issue (Month): 2 ()
Contact details of provider:
Postal: American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323
Web page: http://www.aresnet.org/
Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
Find related papers by JEL classification:
- L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
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