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House Price Expectations

Author

Listed:
  • Gohl, Niklas

    (DIW Berlin)

  • Haan, Peter

    (DIW Berlin)

  • Michelsen, Claus

    (DIW Berlin)

  • Weinhardt, Felix

    (European University Viadrina, Frankfurt / Oder)

Abstract

This study examines short-, medium-, and long-run price expectations in housing markets. We derive and test six hypothesis about the incidence, formation, and relevance of price expectations. To do so, we use data from a tailored household survey, past sale and rental offerings, satellites, and from an information RCT. As novel findings, we show that price expectations exhibit mean reversion in the long-run. Moreover, we do not find evidence for biases related to individual housing tenure decisions or regret aversion. Confirming existing findings, we show that local market characteristics matter for expectations throughout, as well as aggregate price information. Lastly, we corroborate existing evidence that expectations are relevant for portfolio choice.

Suggested Citation

  • Gohl, Niklas & Haan, Peter & Michelsen, Claus & Weinhardt, Felix, 2022. "House Price Expectations," IZA Discussion Papers 15040, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15040
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    1. Maximilian Blesch & Philipp Eisenhauer & Peter Haan & Boryana Ilieva & Annekatrin Schrenker & Georg Weizsäcker, 2023. "Biased Wage Expectations and Female Labor Supply," Rationality and Competition Discussion Paper Series 411, CRC TRR 190 Rationality and Competition.

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    More about this item

    Keywords

    price expectations; housing markets;

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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