Bubble, bubble, toil, and trouble
The rapid rise of real estate prices in recent years has led to fears of a housing price bubble. But, to determine whether there has been a bubble–and whether the bubble is bursting–one needs to know what home prices “should” be. The authors estimate a simple model of home prices and find that prices were, on average, above their predicted levels during 2000–06. However, this result does not hold true uniformly across the country. To the extent that prices were overheating, this was happening largely in markets that have traditionally exhibited volatile prices
Volume (Year): (2007)
Issue (Month): Q I ()
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References listed on IDEAS
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- Richard J. Rosen, 2005. "Explaining recent changes in home prices," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Jul.
- Todd Sinai & Nicholas S. Souleles, 2005.
"Owner-Occupied Housing as a Hedge Against Rent Risk,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 120(2), pages 763-789.
- Todd Sinai & Nicholas S. Souleles, 2003. "Owner-Occupied Housing as a Hedge Against Rent Risk," NBER Working Papers 9462, National Bureau of Economic Research, Inc.
- Todd Sinai & Nicholas S. Souleles, 2005. "Owner-occupied housing as a hedge against rent risk," Working Papers 05-10, Federal Reserve Bank of Philadelphia.
- Raphael W. Bostic & Stanley D. Longhofer & Christian Redfearn, 2006. "Land Leverage: Decomposing Home Price Dynamics," Working Paper 8565, USC Lusk Center for Real Estate.
- Somerville, C Tsuriel, 1999. "Residential Construction Costs and the Supply of New Housing: Endogeneity and Bias in Construction Cost Indexes," The Journal of Real Estate Finance and Economics, Springer, vol. 18(1), pages 43-62, January.
- Jonathan McCarthy & Richard Peach, 2004. "Are home prices the next "bubble"?," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 1-17.
- Margaret Hwang Smith & Gary Smith, 2006. "Bubble, Bubble, Where's the Housing Bubble?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 37(1), pages 1-68.
- Karl E. Case & Robert J. Shiller, 2003. "Is There a Bubble in the Housing Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 299-362.
- Joshua H. Gallin, 2003. "The long-run relationship between house prices and income: evidence from local housing markets," Finance and Economics Discussion Series 2003-17, Board of Governors of the Federal Reserve System (U.S.).
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