Determinants of Real House Price Dynamics

Determinants of Real House Price Dynamics

We explore the dynamics of real house prices…from a panel data set of 62 metro areas from 1979-1995. Serial correlation is higher in metro areas with higher real income, population growth and real construction costs. [Return to normal housing price levels after booms and busts] is greater in large metro areas and faster-growing cities with lower construction costs. Empirically, substantial overshooting of prices can occur in high real construction cost areas, which have high serial correlation and low [returns to normal price levels], such as the coastal cities of Boston, New York, San Francisco, Los Angeles and San Diego.

Dennis R. Capozza, Patric H. Hendershott, Charlotte Mack, and Christopher J. Mayer


October 2002

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By |2018-01-01T00:00:00-08:00January 1st, 2018|Efficiency/Growth, Land Use Regulation, Reference|