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Measuring the effect of the real estate bubble: a house price index for Bilbao

Maria J. Barcena, Patricia Mendez, Maria B. Palacios and Fernando Tusell-Palmer

Chapter 15 in Papers presented during the Narodowy Bank Polski Workshop: Recent trends in the real estate market and its analysis, 2013, 2013, pp 127-156 from Narodowy Bank Polski

Abstract: Houses are traded at relatively infrequent times and can hardly be standardized: two equally built and furnished houses may command widely different prices in the market on account of their different location or even orientation. Clearly, the computation of an index such as Laspeyres’ cannot be contemplated, both because of lack of standardization and infrequent trading. On the other hand, there is little market visibility; transaction prices are seldom published, further increasing the difficulties inherent to the construction of a house price index. In this paper we use advertised (selling) prices as a proxy of transaction prices, and geographically weighted hedonic models to account for heterogeneity in quality and location. This gives a workable alternative to conventional approaches with the added benefit that it can provide price information in near-real time.

Keywords: house prices; spatial econometrics; semi-parametric models (search for similar items in EconPapers)
JEL-codes: C14 C81 R21 (search for similar items in EconPapers)
Date: 2013
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Measuring the Effect of the Real Estate Bubble: a House Price Index for Bilbao (2011) Downloads
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