Disequilibrium in the housing market can be detected by comparing the actual price-rent ratio with its equilibrium counterpart obtained from the user-cost condition. Empirical implementation of this idea, however, is problematic because of quality differences between sold and rented dwellings....

Departures of the housing market from equilibrium can be detected by comparing the actual price-rent ratio with the user cost of owner occupying. Empirical implementation of this idea, however, is problematic for two reasons. First, the price-rent ratio needs to be quality adjusted. Second, the...