Supply, Demand and Prices in the US Housing Market
The slowdown in the US economy in 2008, and in the housing market in particular, has been accom- panied by a sharp fall in house prices and a glut of homes for sale on the market. While the idea that this overhang of dwellings for sale should place downward pressure on house prices is intuitive, little empirical work has been done in this area. This paper explicitly models the relationship between changes in house prices and various measures of housing supply. The results show that months supply of new homes places greater downward pressure on house prices that the months supply of existing homes. We build a small simulation model to examine the evolution of the housing market.
|Date of creation:||Dec 2012|
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- Krainer, John, 2001. "A Theory of Liquidity in Residential Real Estate Markets," Journal of Urban Economics, Elsevier, vol. 49(1), pages 32-53, January.
- Nathalie Girouard & Mike Kennedy & Paul van den Noord & Christophe André, 2006. "Recent House Price Developments: The Role of Fundamentals," OECD Economics Department Working Papers 475, OECD Publishing.
- Zuehlke, Thomas W, 1987. "Duration Dependence in the Housing Market," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 701-704, November.
- Williams, Joseph T, 1995. "Pricing Real Assets with Costly Search," Review of Financial Studies, Society for Financial Studies, vol. 8(1), pages 55-90.
- Jerez, Belén & Díaz, Antonia, 2010.
"House prices, sales, and time on the market : a search-theoretic framework,"
UC3M Working papers. Economics
we1033, Universidad Carlos III de Madrid. Departamento de Economía.
- Antonia Díaz & Belén Jerez, 2013. "House Prices, Sales, And Time On The Market: A Search‐Theoretic Framework," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54, pages 837-872, 08.
- Belen Jerez & Antonia Diaz, 2009. "House Prices, Sales and Time on the Market: A Search-Theoretic Framework," 2009 Meeting Papers 1006, Society for Economic Dynamics.
- Wheaton, William C, 1990. "Vacancy, Search, and Prices in a Housing Market Matching Model," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1270-1292, December.
- Vladimir Klyuev, 2008. "What Goes Up Must Come Down? House Price Dynamics in the United States," IMF Working Papers 08/187, .
- Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-690, September.
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