House Price Expectations

Niklas Gohl, Peter Haan, Claus Michelsen and Felix Weinhardt

No 1994, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

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.

Keywords: Housing markets; price expectations (search for similar items in EconPapers)
JEL-codes: R21 R31 (search for similar items in EconPapers)
Pages: 33 p.
Date: 2022
New Economics Papers: this item is included in nep-ure
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