Local House Price Growth Accelerations

Alexander Bogin, William Doerner and William Larson

No 16-02, FHFA Staff Working Papers from Federal Housing Finance Agency

Abstract: We document real house price growth accelerations in U.S. ZIP codes between 1975 and 2015. Acceleration episodes, which are defined to include relatively extreme periods of price growth, tend to exhibit temporal clustering and occur with greater frequency in large versus small cities. We exploit within-city variation in price dynamics to provide evidence that growth accelerations initially overshoot sustainable price levels but, in some areas, may reflect positive underlying economic fundamentals. Price levels post-acceleration are most sustainable in large cities, especially near city centers. Dynamics are generally consistent with empirical mean-reversion models and theories regarding the effects of traffic congestion and the elasticity of housing supply on house price gradients within the city.

Keywords: house price cycles; Great Recession; real estate; boom; bust; house price index (search for similar items in EconPapers)
JEL-codes: E32 R30 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2016-06
New Economics Papers: this item is included in nep-mac and nep-ure
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Citations: View citations in EconPapers (1)

Published in Journal of Real Estate Finance and Economics, 2019, volume 58, number 2, pages 201-222

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Persistent link: https://EconPapers.repec.org/RePEc:hfa:wpaper:16-02

DOI: 10.1007/s11146-017-9643-y

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