House price expectations

Niklas Gohl, Peter Haan, Claus Michelsen and Felix Julian Weinhardt

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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 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; house price expectations (search for similar items in EconPapers)
JEL-codes: R21 R31 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2022-02-10
New Economics Papers: this item is included in nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:117761

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