Essays on the Household-level Effects of House Price Growth - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Essays on the Household-level Effects of House Price Growth write by Claudia Ayanna Sitgraves. This book was released on 2009. Essays on the Household-level Effects of House Price Growth available in PDF, EPUB and Kindle. This dissertation explores the effects of fluctuations in housing values on household saving and investment decisions. Chapter 1 examines the relationship between changes in housing values and household saving decisions. Fluctuations in housing values may affect household saving and consumption by increasing households' perceived wealth, or by relaxing borrowing constraints. Moreover, the increased liquidity of home equity during the recent housing boom may have led household behavior to respond more than in past years to changes in housing wealth. This chapter is the first analysis to provide evidence from household-level microdata suggesting that the housing wealth effect may have increased in line with increased access to housing-collateralized debt. Using data from the Survey of Income and Program Participation for the years 1984 - 2003, I estimate an average elasticity of household active saving with respect to MSA-level house prices of -0.222, which corresponds to a 1 cent decrease in annual active saving when housing wealth increases by 1 dollar. When I estimate housing wealth effects separately between 1984 and 1990, and between 1996 and 2003, I find smaller effects during the earlier period, but large and significant effects during the later period. During the later period, I estimate an average elasticity of household active saving with respect to MSA-level house prices of -1.044, which corresponds to a 3 cent decrease in annual active saving when housing wealth increases by 1 dollar. Further evidence comparing the magnitude of the wealth effect between different subpopulations -- older homeowners versus younger homeowners, and recent homebuyers versus those with longer tenure -- suggests that a relaxation of liquidity constraints, rather than changes in the composition of the homeowner population, is a central factor contributing to the increase in the housing wealth effect. Chapter 2 explores the connection between growth in housing values, uncertainty over future housing values, and property owners' investments in housing. Residential housing is a significant share of most American households' asset holdings. As such, the decision to build, to buy, or to make significant improvements to a home is driven not only by consumption considerations, but is also an investment decision. By modeling property owners' housing investment decisions using a framework of optimal capital investment where investments are irreversible and there is uncertainty in future asset values, this analysis theoretically predicts and empirically estimates the extent to which property owners respond to changes in the profitability of housing investment by making investments in their stock of housing. Using a unique dataset of residential sales, geographic information, and the universe of building permits issued in Los Angeles between 1999 and 2008, and focusing on nonresident landlords and "improver-movers"--Owner-occupiers who make improvements to their properties and subsequently sell the property, I find that when housing values increase, property owners are more likely to make capital investments, and that the value and square footage of these investments is larger. When house price volatility is high, property owners are less likely to make investments. However, conditional on the decision to invest, the value and square footage of investments is larger. This result is shown to be a consequence of property owners' optimally delaying capital investment when uncertainty over future prices is high. Chapter 3 documents the extent to which residential real estate development is cyclical - exhibiting periods of rapid expansion followed by periods of rapid contraction - using New York City as a case study. This chapter provides an overview of residential development activity in New York City during the years 2000 - 2008. In this analysis, I describe the effects of this real estate "boom" on the housing market in New York City during these years, and characterize the long-term effects of the "boom" and subsequent "bust" in residential development on the composition of the City's housing stock. Economic theories of cyclicality in real estate markets, outlined in this chapter, show that uncertainty over the exact timing of price declines coupled with a long development lag can lead to buildings being completed and new units entering the market even as prices decline. Although the elasticity of housing supply is lower in New York City than in other areas, building activity tends to follow a boom-and-bust pattern similar to other areas. Neighborhoods with higher levels of amenities experienced more growth in residential housing supply, and public involvement in development activity (both to facilitate and to restrict development) became less important for builders as the boom progressed. As building activity slows, City officials and developers are taking steps to ensure that stalled construction sites, rather than becoming eyesores and safety hazards, are preserved for future use.
Essays on Housing Prices
Essays on Housing Prices - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Essays on Housing Prices write by Yifan Chen. This book was released on 2022. Essays on Housing Prices available in PDF, EPUB and Kindle. This dissertation examines the dynamics between housing prices, firms, and households. The first chapter focuses on sequential information revelation in the housing markets; the second chapter investigates the impact of house price appreciation on the returns of value versus growth firms; the third chapter estimates the effect of gun control on home values. In Chapter 1, I use Amazon's progressive revelation of its new headquarters locations in Virginia and New York to demonstrate that the housing market fully incorporates information about future demand well before disclosure. Spatial difference-in-differences analysis shows that housing prices near the Virginia headquarters exhibit 4.9% premia before Amazon's headquarters decision but no additional increase upon decision. Price premia for New York reach 17.5% before the decision but disappear once Amazon cancels the headquarters. Other finalist cities exhibit no price premia, precluding the possibility of speculation. Overall, this study suggests that the housing market can quickly incorporate private information about future demand shocks. In Chapter 2, I investigate the value-growth premium puzzle by merging insights from urban economics and finance that relate firm location to its stock performance. The value-growth premium in locations with high historical house price appreciation is 3.6% per year larger than the premium in areas that experienced little house price appreciation. The results support investment-based models explaining the value premium; moreover I find the house price channel reduces returns of growth firms rather than increasing returns of value firms. House price appreciation remains significant after controlling for common explanations of the premium. In Chapter 3, using cross-border variation in the timing of state gun control law passage dates, I find that the introduction of universal background checks for gun sales results in a roughly 2.3 percent decline in housing prices on average. I find a more significant decrease in housing prices, i.e., up to 5.3 percent, if the state is neighboring a Republican rather than a Democratic state. This result is robust to several specification tests and does not appear to be associated with neighborhood crime rate changes.
The Pricing-Out Phenomenon in the U.S. Housing Market
The Pricing-Out Phenomenon in the U.S. Housing Market - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The Pricing-Out Phenomenon in the U.S. Housing Market write by Francesco Beraldi. This book was released on 2023-01-06. The Pricing-Out Phenomenon in the U.S. Housing Market available in PDF, EPUB and Kindle. The COVID-19 pandemic further extended the multi-year housing boom in advanced economies and emerging markets alike against massive monetary easing during the pandemic. In this paper, we analyze the pricing-out phenomenon in the U.S. residential housing market due to higher house prices associated with monetary easing. We first set up a stylized general equilibrium model and show that although monetary easing decreases the mortgage payment burden, it would raise house prices, lower housing affordability for first-time homebuyers, and increase housing wealth inequality between first-time and repeat homebuyers. We then use the U.S. household-level data to quantify the effect of the house price change on housing affordability relative to that of the interest rate change. We find evidence of the pricing-out effect for all homebuyers; moreover, we find that the pricing-out effect is stronger for first-time homebuyers than for repeat homebuyers. The paper highlights the importance of accounting for general equilibrium effects and distributional implications of monetary policy while assessing housing affordability. It also calls for complementing monetary easing with well-targeted policy measures that can boost housing affordability, particularly for first-time and lower-income households. Such measures are also needed during aggressive monetary tightening, given that the fall in house prices may be insufficient or too slow to fully offset the immediate adverse impact of higher rates on housing affordability.
House Prices and Household Behavior
House Prices and Household Behavior - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook House Prices and Household Behavior write by Kevin Russell Krivacsy. This book was released on 2018. House Prices and Household Behavior available in PDF, EPUB and Kindle. Residential property values have only recently recovered from the effects of the Great Recession and the housing bubble and burst. During this period, cities were not collecting as much tax revenue as predicted because of depressed housing prices and the global economy suffered greatly because of it.Economists and others have studied the causes of the instability in property values in recent years from many angles. Their research has been influential in explaining what happened to the housing market during that time. Yet, what is missing is a detailed level analysis of how the spatial structure of our cities may contribute to this instability or stability in residential property values and a better understanding of their local dynamics.While economists are likely correct in their macroeconomic focus, there is still room for research on the role that local factors may have played or will play in the determination of residential property values. Even within metropolitan areas, there may have been a difference in magnitude of property value fluctuation.Therefore, this study focuses on the extent to which the urban form may contribute to overall economic stability as seen through the stability of residential property values. This research builds on past research by 1) incorporating more detailed and accurate neighborhood measures, 2) contributing to the literature by conducting cointegration at a very local level and 3) assessing the impact that neighborhood, demographic and economic attributes at the local level may have on the long-term stability of property values in our urban areas.
Fundamental Drivers of House Prices in Advanced Economies
Fundamental Drivers of House Prices in Advanced Economies - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Fundamental Drivers of House Prices in Advanced Economies write by Ms.Nan Geng. This book was released on 2018-07-13. Fundamental Drivers of House Prices in Advanced Economies available in PDF, EPUB and Kindle. House prices in many advanced economies have risen substantially in recent decades. But experience indicates that housing prices can diverge from their long-run equilibrium or sustainable levels, potentially followed by adjustments that impact macroeconomic and financial stability. Therefore there is a need to monitor house prices and assess whether they are sustainable. This paper focuses on fundamentals expected to drive long run trends in house prices, including institutional and structural factors. The scale of potential valuation gaps is gauged on the basis of a cross-country panel analysis of house prices in 20 OECD countries.
