Cyclicity Of Housing Markets Under The Specific Condition Of The Existence Of A Bubble In The Real Estate Market

Weise Andreas Dittmar (), Philips Jürgen W. () and Hochheim Norberto ()
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Weise Andreas Dittmar: Department of Industrial Engineering, Federal University of Santa Maria in Santa Maria
Philips Jürgen W.: Department of Civil Engineering, Federal University of Santa Catarina in Florianópolis
Hochheim Norberto: Department of Civil Engineering, Federal University of Santa Catarina in Florianópolis

Real Estate Management and Valuation, 2015, vol. 23, issue 3, 85-98

Abstract: In recent years, real estate bubbles have been commonplace in housing markets all over the world. That’s why we examine the relation between housing prices during bubbles in 101 cities located in ten different countries, aiming to explain the housing market cycle during a housing bubble, using economic and housing indicators. We obtained data on eight variables used in market cycle analysis which may be able to explain the existence of speculation and the ideal market cycle. The obtained resultsshow that many of economic and housing indicators begin to decrease while housing prices peak. Only the quantity of transactions peaks during the following year. We also observed that a housing bubble can follow three different scenarios, i.e.: the bubble does not burst, or can burst with a slow decline or sudden and rapid collapse. Finally, it is possible to determine that the same variables can provide clear insight into a bubble in the real estate cycle.

Keywords: housing bubble; housing market; cyclicality (search for similar items in EconPapers)
JEL-codes: E32 O57 R10 R31 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:remava:v:23:y:2015:i:3:p:85-98:n:9

DOI: 10.1515/remav-2015-0028

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