RT Journal Article
SR Electronic
A1 Wenz, Michael G.
A1 Yu, William Wei-Choun
T1 Housing Price Fundamentals through the Business Cycle
JF European Journal of Business Science and Technology
YR 2016
VO 2
IS 2
SP 91
OP 106
DO 10.11118/ejobsat.v2i2.55
UL https://ejobsat.cz/artkey/ejo-201602-0001.php
AB We examine the fundamental determinants of nominal home price growth from 1995 to 2012 across 300 metropolitan areas in the U.S. This sample period provides a trough-to-trough time period that allows for analysis through a complete business cycle. By using a supply-to-demand ratio for home price appreciation, we identify a straightforward and powerful method for predicting home price appreciation across markets. We suggest an alternative and simple method for addressing endogeneity in house prices and include a comprehensive measure of human capital. We find five significant factors: home supply growth, personal income growth, human capital, an ocean dummy, and geographic constraint.