Housing Bubbles: A Survey

Christopher Mayer

Annual Review of Economics, 2011, vol. 3, issue 1, 559-577

Abstract: The past 25 years have represented two periods of extreme movements in U.S. and global house prices that appear to be much larger than can be easily explained by changes in fundamentals. These episodes spurred research on housing bubbles that focused attention on the role of outsized expectations in excessive house price appreciation. By contrast, some economists pointed to alternative explanations for excess volatility, including liquidity constraints, lending cycles, search externalities, and zoning delays. Empirical work supports the role of these factors in explaining at least some of the cyclical variation of house prices and inventories of homes for sale. Existing research does not yet provide a crisp definition of a housing bubble nor does it allow researchers to predict where or when bubbles can occur.

Keywords: housing cycles; housing market efficiency (search for similar items in EconPapers)
JEL-codes: G01 G14 R3 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (59)

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