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We use a unique feature of California's property tax system to empirically identify the effect of selling homeowners' past property tax payments on their choice of listing price. Although past property taxes are sunk costs, we find that they have a significant positive effect on the sellers'...
Persistent link: https://www.econbiz.de/10012947314
This paper uses a simple model based on the board game Monopoly to analyze the drivers of house prices and wealth inequality. Simulations show that the inequality depends on the timing and distribution of home ownership, house price growth and wage growth. An extension of the classical game with...
Persistent link: https://www.econbiz.de/10012902176
We study scar formation and persistence after a house price bubble has burst using data on 3,089 US counties and county equivalents over the period 1980q1-2019q4. We date house price booms and busts for each county, and identify periods with explosive house price developments. Applying a sharp...
Persistent link: https://www.econbiz.de/10015141915
Historical anecdotes of new investors being drawn into a booming asset market, only to suffer when the market turns, abound. While the role of investor contagion in asset bubbles has been explored extensively in the theoretical literature, causal empirical evidence on the topic is virtually...
Persistent link: https://www.econbiz.de/10011524199
Capitalization (CAP) rates for residential real estate are generally assumed to vary with interest rates, expected appreciation, and a variety of other factors but not with the size or value of the unit. It is generally assumed that landlords can adjust unit size to increase supply in a size...
Persistent link: https://www.econbiz.de/10013080243
Until recently, the literature ignored the interactions between housing and macroeconomics. Thanks to many researchers' contributions, the macro-housing field is in development. This review complements previous research and highlights a few areas that have made significant progress lately. They...
Persistent link: https://www.econbiz.de/10013461195
This paper examines the effect of a currency changeover on prices. A parsimonious model shows that, during a period of currency changeover, sellers and buyers conversely opt for the currency dominating the negotiation based on exchange rate fluctuations between the preceding and the new currency...
Persistent link: https://www.econbiz.de/10013047007
Individuals form economic expectations for a given region by extrapolating from the economic outcomes of another geographic area, a phenomenon we term 'spatial extrapolation.' We exploit the scenario when Out-of-town (OOT) buyers purchase property in places different from their previous...
Persistent link: https://www.econbiz.de/10014349156
This paper studies the pricing implications of financial uncertainty on housing markets. Out-of-sample tests show that the exposure to financial uncertainty predicts the cross-sectional variation in market returns. Housing markets with a more negative financial uncertainty beta imply higher...
Persistent link: https://www.econbiz.de/10014350425
In recent years, UK housing policy has sought to restrict investment behaviour and increase the homeownership rate. This paper contributes to the literature by estimating the effect of a 3% additional transaction tax, known as stamp duty land tax (SDLT), on the Buy-to-Let (BTL) market in the UK....
Persistent link: https://www.econbiz.de/10014350985