The supply chain of the real estate sector accounts for one fifth of Italian GDP; its importance for the banking system is even greater: lending to this sector accounts for more than one third of total loans to the private sector. The crisis in the construction and real estate sector started...

We show that a strong linear relationship exists between income and house price quantiles in Sydney (Australia), Houston, and the state of Texas. This suggests that the house price distribution is closely approximated by the income distribution after a location-scale transformation. The slope of...

We investigate whether recently high U.S. house prices are justified by fundamental factors such as personal income, population, house rent, stock market wealth, building costs, inflation, and mortgage rate. The standard unit root and cointegration tests with aggregate data indicate that house...

We estimate alternative price to rent ratios in the Spanish housing market by considering different stochastic discount factors in present value models similar to those used in the financial literature but where the higher rigidity that characterises this market is taken into account. We...

There is a growing consensus that reform is needed for the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. It is often suggested that the connections between the GSEs and the federal government should be permanently severed and the firms reduced in size so that their...

Movements in aggregate and regional house prices are largely accounted for by movements in the rent-price ratio rather than movements in rents. Movements in rent-price ratios are correlated with trend deviations in household income and the rate of home ownership, both of which are at odds with...

The Gordon Growth Model is used to derive widely differing fundamental values of the same gross rental yield for six hypothetical housing purchasers listed in declining order of magnitude: a fully funded consumer with a marginal tax rate of 40%, a fully funded buy to let investor with a marginal...

This paper demonstrates that new house prices can exceed direct development costs by considerable margins in competitive housing markets with finite price-elasticities of demand and no restrictive land-use regulation. The premium reflects the value of the option to delay developing the marginal...

This paper quantitatively accounts for the cyclical dynamics of key macroeconomic housing and mortgage market variables using a tractable, search-theoretic model of housing with equilibrium mortgage default. To explain these dynamics, the model highlights the importance of liquidity spirals...

This paper investigates the macroeconomic effects of search risk in the housing market. To do so, I introduce a tractable directed search model of housing with mul- tidimensional buyer and seller heterogeneity. I incorporate this framework in an in- complete markets macroeconomic model with...