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House Price Expectations

Author

Listed:
  • Gohl, Niklas

    (DIW Berlin and University of Potsdam)

  • Haan, Peter

    (DIW Berlin, FU Berlin and Netspar)

  • Michelsen, Claus

    (DIW Berlin and Leuphana University Lueneburg)

  • Weinhardt, Felix

    (European University Viadrina and DIW Berlin)

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," Rationality and Competition Discussion Paper Series 313, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:313
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    References listed on IDEAS

    as
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    Keywords

    housing markets; price expectations;

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