Is There A Housing Bubble in Irvine, California? A Repeat-Sales Analysis Using a New Data Set

Although there have been many recent studies of the housing market and the possible housing bubble, very few studies take a micro-oriented approach. We construct a repeat-sales housing price index from a new data set for Irvine, California to understand recent trends in its housing market. Our analysis for 1984 to 2003 suggests that Irvine’s housing market did demonstrate traits of a bubble during certain periods of time. In fact, the bubble of the late 1980s and early 1990s appears to have been even more pronounced in Irvine. Our analysis does not, however, demonstrate conclusively that Irvine’s housing market has been experiencing a bubble the past few years.