Housing supply and foreclosures
We explore the role of foreclosure inventories in a model of housing supply. The foreclosure variable is necessary to account for the steep and sustained drop in new construction activity following the U.S. housing market bust beginning in 2006. There is modest evidence that local banking conditions play a role in determining housing starts. Even with state-level foreclosures and banking variables in the model, there is a sizeable post-2006 residual common to all states. We argue that, in addition to observable macro and local factors, housing starts in the Great Recession have been weighed down in part by aggregate uncertainty factors.
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- Bulan, Laarni & Mayer, Christopher & Somerville, C. Tsuriel, 2009.
"Irreversible investment, real options, and competition: Evidence from real estate development,"
Journal of Urban Economics,
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- Duca, John V & Muellbauer, John & Murphy, Anthony, 2011. "House Prices and Credit Constraints: Making Sense of the US Experience," CEPR Discussion Papers 8360, C.E.P.R. Discussion Papers.
- John V. Duca & John Muellbauer & Anthony Murphy, 2011. "House Prices and Credit Constraints: Making Sense of the U.S. Experience," SERC Discussion Papers 0077, Spatial Economics Research Centre, LSE.
- Duca, John V. & Muellbauer, John N. & Murphy, Anthony, 2011. "House prices and credit constraints: making sense of the U.S. experience," Working Papers 1103, Federal Reserve Bank of Dallas.
- Mayer, Christopher J. & Somerville, C. Tsuriel, 2000. "Residential Construction: Using the Urban Growth Model to Estimate Housing Supply," Journal of Urban Economics, Elsevier, vol. 48(1), pages 85-109, July.
- John M. Quigley & Steven Raphael, 2005. "Regulation and the High Cost of Housing in California," American Economic Review, American Economic Association, vol. 95(2), pages 323-328, May.
- Quigley, John M. & Raphael, Steven, 2006. "Regulation and the High Cost of Housing in California," Berkeley Program on Housing and Urban Policy, Working Paper Series qt3hh7s35m, Berkeley Program on Housing and Urban Policy.
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