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Can Google Search Data be Used as a Housing Bubble Indicator?

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  • Are Oust
  • Eidjord Ole Martin

Abstract

The aim of this paper is to test whether Google search volume indices can be used to predict house prices and to identify bubbles in the housing market. We analyse the 06/07 U.S. housing bubble, taking advantage of the hetrogenius house price development in different U.S. states with both bubble and non-bubble states. From 204 housing related keywords, we test both single search terms and indexes with sets of search terms and finds that the several keywords preforms very well as a bubble indicator. Google search for Real Estate Agent displayed the most predictive power for the house prices, of all the keywords and indexes tested, globally in the US. Google searches volume outperforms the well-established Consumer Confidence Index as a leading indicator for the housing market.

Suggested Citation

  • Are Oust & Eidjord Ole Martin, 2018. "Can Google Search Data be Used as a Housing Bubble Indicator?," ERES eres2018_151, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2018_151
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    References listed on IDEAS

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    1. Case Karl E. & Quigley John M. & Shiller Robert J., 2005. "Comparing Wealth Effects: The Stock Market versus the Housing Market," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-34, May.
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    4. Case, Karl E. & Quigley, John M. & Shiller, Robert J., 2001. "Comparing Wealth Effects: The Stock Market versus The Housing Market," Department of Economics, Working Paper Series qt44k6g6vx, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    5. Hans Lind, 2009. "Price bubbles in housing markets," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 2(1), pages 78-90, March.
    6. Hyunyoung Choi & Hal Varian, 2012. "Predicting the Present with Google Trends," The Economic Record, The Economic Society of Australia, vol. 88(s1), pages 2-9, June.
    7. Challet Damien & Bel Hadj Ayed Ahmed, 2013. "Predicting financial markets with Google Trends and not so random keywords," Working Papers hal-00851637, HAL.
    8. Jason Kuruzovich & Siva Viswanathan & Ritu Agarwal & Sanjay Gosain & Scott Weitzman, 2008. "Marketspace or Marketplace? Online Information Search and Channel Outcomes in Auto Retailing," Information Systems Research, INFORMS, vol. 19(2), pages 182-201, June.
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    Cited by:

    1. Bricongne, Jean-Charles & Meunier, Baptiste & Pouget, Sylvain, 2023. "Web-scraping housing prices in real-time: The Covid-19 crisis in the UK," Journal of Housing Economics, Elsevier, vol. 59(PB).

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    More about this item

    Keywords

    Google search volume; Google Trends; Housing; Housing Bubble; Price predication;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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