Search and Predictability of Prices in the Housing Market

Allan Timmermann, Møller, Stig, Thomas Pedersen and Schütte, Erik Christian Montes
Authors registered in the RePEc Author Service: Erik Christian Montes Schütte

No 15875, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop a new housing seach index (HSI) extracted from online search activity on a limited set of keywords related to the house buying process. We show that HSI has strong predictive power for subsequent changes in house prices, both in-sample and out-of-sample, and after controlling for the effect of commonly used predictors. Compared to the stock market, online search has much stronger predictive power over house prices and its effect also lasts longer. Variation in housing search is a particularly strong predictor of subsequent price changes in markets with inelastic housing supply and high speculation.

Keywords: Internet search; Housing markets; Housing demand; Forecasting; Inelastic housing supply (search for similar items in EconPapers)
JEL-codes: C10 E17 G10 R3 (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-for, nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Search and Predictability of Prices in the Housing Market (2024)
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