Increase In Home Prices Research Articles

The 3 Decades Global Financial Policy Failure in Housing Market, Runaway Home Prices, Today’s Growing Homeless Crisis: Eddison Walters Real Estate Housing Technology Structural Change Transformational Theory

Failure to address technological-driven structural changes in the real estate market that began three decades ago has caused runaway home prices that developed countries are experiencing today. The real estate crash that preceded the Global Financial Crisis, and the entire Global Financial Crisis resulted from the panic that was created about the rapid increase in home prices that was falsely labeled a real estate bubble by the media which was quickly adapted by policymakers. Policymakers and the media blamed greedy mortgage brokers for the rapid increase in home prices, accusing mortgage brokers of providing mortgages to too many people for homes that the borrowers could not afford. It turns out that the media and policymakers were completely wrong when mortgage brokers were falsely blamed for creating a real estate bubble because a real estate bubble never existed. The true cause of the rapid increase in home prices was the early stages of a real estate boom from technological-driven structural changes in the real estate market. Failure to address structural changes in the real estate housing market which started three decades ago, has resulted in runaway home prices in the United States and developed countries around the world. As a result of the failure widespread economic hardship from homelessness is a significant risk as working families find themselves priced out of the housing market. Three decades of economic policy failures and the mismanagement of the housing sector have resulted in a looming housing crisis that continues to increase as developed countries face runaway home prices. Policymakers throughout developed countries eagerly accepted the media-driven misinformation of a real estate bubble without any evidence presented supporting the narrative. The failure of policymakers to gain an understanding of factors that have been driving the rapid increase in home prices which began three decades ago, resulted in the real estate crash, Global Financial Crisis, and Great Recession. Much of the economic hardship and the looming housing crisis facing working families today could have been avoided. For many working American families, the prospect of home ownership no longer exists due to skyrocketing home prices. The looming homeless crisis facing the developed world today is the direct result of economic policy failures that have ignored the structural changes in the housing market for three decades. The move from print media real estate listings to online real estate listings and the adaptation of online mortgage loan applications along with automated mortgage underwriting between 1995 and 1999, exponentially increased the quantity of inventory needed in the housing market of developed countries. The shift in the demand curve for housing structurally changed the housing market in developed countries resulting in the complete transformation that saw the demand for housing skyrocket by 2000. New homebuyers who previously only had access to local housing markets before the transformation of the housing market began in 1995, had full access to homes listed anywhere online in other real estate markets by the end of 1999. The increased demand caused the rapid growth in home prices. Failure to implement policies to drastically increase home inventory in developed countries to address the structural transformation of the housing market which drastically increased the demand for homes was a significant economic policy failure. Instead of implementing policies to significantly increase home inventory, new construction was idle for over a decade as policymakers adopted the media-driven misinformation of a real estate bubble and supported policies to address the nonexistent real estate bubble.

Home Price Change and Ethno-racial Residential Segregation: Temporal Relationships at the Metro Level

Although rates of residential racial segregation and home prices are undoubtedly related, the temporal nature of the relationship has rarely been studied. Using fixed effects models in a cross-lagged framework, we examine how prior changes in segregation and home prices at the metro level predict changes in the other. Our findings suggest that increases in home prices predict increasing racial segregation years later, but increases in segregation fail to predict subsequent change in home values. Metros that experience a 1 standard deviation increase in home prices experience an associated 0.25 standard deviation increase in Black-White segregation 10 years later and a 0.18 standard deviation increase 20 years later. No relationship is observed for Hispanic-White segregation. We discuss implications for understanding the economic underpinnings of segregation. Findings also offer insight into future segregation trends and illuminate how changes in the housing market may drive demographic trends more broadly.

How hurricanes sweep up housing markets: Evidence from Florida

This paper studies the impact of hurricanes on housing markets and population turnover using microdata from Florida during 2000–2016. We find that hurricanes cause a temporary increase in home prices and a concurrent decrease in transactions, which together imply a negative transitory shock to the housing supply. Using mortgage application data, we find that incoming homeowners in this period have higher incomes, leading to an overall shift toward wealthier groups. Our findings suggest that market responses to natural disasters can lead to uneven and lasting demographic changes in affected communities, even with a full recovery in physical capital.

Moving to better opportunities? Housing market responses to the top 4% policy

This paper studies the housing market responses to the California Top 4% policy adopted in 2001, which guarantees that the top 4% of seniors in each high school receive admission to the University of California system. The policy increased the desirability of houses in low-ranked high schools catchment areas (HSCAs). Using transaction-level property sales data, the study finds that homes in low-ranked HSCAs experienced a five percent increase in home prices after the policy relative to those in higher-ranked HSCAs. Furthermore, we analyze heterogeneous effects using ethnic last names to identify Asian and Hispanic homeowners and find that Asian homeowners seem to be more responsive to the policy than average, while Hispanic homeowners respond similarly to an average household. Finally, by matching co-owners’ full names, we construct a household panel to understand potential moving patterns that drive the price effect. We find that households who would have moved from a bottom two quintiles HSCA to higher-ranked HSCAs were more likely to move to a similarly ranked HSCA instead.

Home prices, fertility, and early-life health outcomes

We estimate the effect of housing price changes on fertility and early-life child health in Denmark. Using rich population register data among women aged 20–44 who own a home, we find that for each 100,000 DKK increase in home prices (equivalent to $12,000), the likelihood of giving birth increases by 0.27 percentage points or 2.35%. These estimates are similar to findings from the US per dollar of home price change, which is surprising given the strong pro-natalist policies and generous government programs in Denmark. We also present the first estimates of the effect of home prices on infant health. Our findings indicate that housing price increases lead to better child health at birth in terms of low birth weight and prematurity, however most of these effects reflect changes in the composition of births. There is no evidence of an effect on health during the first five years of life. These findings are consistent with both children and child health being normal goods that are similarly-valued in the US and Denmark.

Opioid Crisis and Real Estate Prices

This paper estimates the impact of opioid abuse on real estate prices. We exploit the variation in opioid prescriptions induced by the staggered passage of state laws intending to limit the abuse of opioids. We document a long-term negative relationship between opioid prescriptions and residential real estate prices. For a one standard deviation change in prescriptions we find a 1.36 percentage points change in home values over the following 5 years. We also estimate a positive increase in home prices of 0.54 and 0.91 percentage points respectively in the first and second years following the passage of these laws. One im- portant factor driving this relationship are changes in mortgage delinquency rates. Overall, our results are consistent with opioid abuse having significant long lasting negative economic effects that are mitigated if opioid supply is limited.

Evidence From Data Analysis, Fifteen Developed Countries and the United States Home Prices Increase Between 1990 to 2006 Result of Advancement In Technology, Worldwide Economic Collapse and Great Recession Result of False Information by Media and Economic Policy Failures: Walters Real Estate Bubble Impossibility Price Transparency Theory, Real Estate Bubble Is Impossible, An End to Economic Policies Based on False

Based on the findings of the current study, policymakers must take a hard look at the media and themselves, because the world can no longer blame the subprime mortgage industry for causing the Global Financial Crisis of 2007 and 2008. The public must demand answers from the media and policymakers explaining how an economic crisis that could have been avoided resulted in the collapse of the global economy. The lack of evidence supporting the theory of a financial bubble and a real estate bubble called for further investigation of factors leading to the Global Financial Crisis of 2007 and 2008. Evidence presented from data analysis in Walters (2018) suggested no financial bubble existed in developed or developing countries around the world, preceding the Global Financial Crisis of 2007 and 2008. Based on data analysis in Walters (2018) the evidence also suggested, the lasting effect of economic policies in response to the Global Financial Crisis of 2007 and 2008 for both developed and developing countries around the world, had no significant impact on the financial sector but pointed to a lack of economic growth. The findings raised significant questions about the existence of a real estate bubble in both developed and developing countries. Evidence from data analysis presented in Walters and Djokic (2019) suggested the existence of a real estate bubble in the United States real estate market preceding the Global Financial Crisis of 2007 and 2008 was a false conclusion. Data analysis in Walters (2019) resulted in, 0.989 Adjusted R-square, 194.041 Mean Dependent Variable, 5.908 Square Error of Regression, 488.726 Sum-of- Square Residual, and 0.00000 Probability (F-statistic), for correlation between the independent variable representing advancement in technology, and the dependent variable representing home purchase price in the United States preceding the Global Financial Crisis of 2007 and 2008. The findings in Walters (2019) concluded the rapid increase in home purchase price in the United States real estate market, was due to increased demand for homes from the adaptation of advancement in technology in the real estate and mortgage industries. The current study expanded the investigation of the growth in home purchase price to fifteen developed countries around the world, building on the findings of previous research by the current researcher. The researcher in the current study concluded, the existence of significant and near-perfect correlation in many cases, between the dependent variable representing growth in home purchase price, and the independent variable representing advancement in technology. The analysis was based on data analyzed from fifteen developed countries around the world, which was collected between 1990 and 2006. The data analysis included home purchase price data from, Canada, United Kingdom, Denmark, Finland, France, Italy, New Zealand, Sweden, Netherlands, Australia, Ireland, Belgium, Norway, Spain, and Portugal. Data preceding the Global Financial Crisis of 2007 and 2008 were analyzed in the current study. The researcher in the current study concluded the existence of overwhelming evidence suggesting advancement in technology was responsible for the rapid increase in home prices in developed countries around the world preceding the Global Financial Crisis of 2007 and 2008. The result of data analysis in the current study provided further confirmation of the accuracy of former Federal Reserve Board Chairmen, Alan Greenspan and Ben Bernanke 2005 assessment which concluded, the occurrence of a real estate bubble developing was impossible due to the Efficient Market Hypothesis, before reversing course subsequent their assertion in 2005 (Belke & Wiedmann, 2005; Starr,2012). The result of the current study provided additional evidence supporting Eddison Walters Risk Expectation Theory of The Global Financial Crisis of 2007 and 2008. The result from data analysis also confirmed the need for the adaptation of Eddison Walters Modern Economic Analysis Theory. As a result of the findings in the current study, the researcher concluded the development of a real estate bubble is impossible where there exists real estate price transparency, as is the case in most developed and developing countries. The researcher presented Walters Real Estate Bubble Impossibility Price Transparency Theory based on the findings. False information of a real estate bubble and predictions of a real estate crash disseminated through the mainstream media and social media can be a destructive force with a disastrous effect on the economy around the world. The failure by the media to hold themselves and policymakers to a higher standard resulted in the Global Financial Crisis of 2007 and 2008. The result of the failure by the media was a worldwide economic crisis and the Great Recession that followed the Global Financial Crisis of 2007 and 2008. Lessons learned from the Global Financial Crisis of 2007 and 2008 can assist in preventing another economic crisis in the future.

Home Prices, Fertility, and Early-Life Health Outcomes

We estimate the effect of housing price changes on fertility and early-life child health in Denmark. Using rich population register data among women aged 20-44 who own a home, we find that for each 100,000 DKK increase in home prices (equivalent to $12,000), the likelihood of giving birth increases by 0.27 percentage points or 2.32%. These estimates are similar to findings from the US per dollar of home price change, which is surprising given the strong pro-natalist policies and generous government programs in Denmark. We also present the first estimates of the effect of home prices on infant health. Our findings indicate that housing price increases lead to better child health at birth in terms of low birth weight and prematurity, however most of these effects reflect changes in the composition of births. There is no evidence of an effect on health during the first five years of life. These findings are consistent with a lack of credit constraints among homeowner families and with both children and child health being normal goods that are similarly-valued in the US and Denmark.

Are Housing Prices Associated with Food Consumption?

Objective: Since January 2010, the U.S. has experienced economic recovery, including a 39% increase in home prices nationally. While higher home prices represent a wealth increase for some homeowners, it may decrease real purchasing power for others. The objective of this study is to examine the relationship between local area housing values and consumption of four food categories. Design: Observational study using data from the Behavioral Risk Factor Surveillance System between 2011 and 2015. Outcomes included number of times per week food was consumed and binary measures denoting consumption ≥2 times per day for four categories: vegetables, fruit, legumes and fruit juice. The primary explanatory variables were metropolitan/micropolitan statistical area home and rental price indices from Zillow. Differential associations by home ownership, age, race/ethnicity and education were examined. Results: Overall, housing values were not associated with intake of vegetables or fruit juice. Among homeowners, a $10,000 increase in home price was associated with small, but statistically significant reductions in fruit and legume consumption. These inverse associations were pronounced among Hispanic and non-Hispanic Black adults. Conclusions: Lower fruit and legume consumption associated with greater housing values may represent one of several explanations including a decrease in purchasing power, given increases in home prices and limited wage growth since 2010.

The design and effects of short-term rental regulation

ABSTRACT Socioeconomic disruptions of short-term rentals have instigated heated debates. Critics have accused short-term rental of various nuisance and gentrification; local governments around the world have imposed regulatory measures from outright ban to taxation on them. As the latest literature has pointed out a lack of studies on the effectiveness of such regulations, this paper attempts to formalize a general taxonomy which renders short-term rental regulations in different cities comparable for the assessment of their effectiveness. Following an investigation of seventeen American cities, six approaches to the regulation were identified. A quantitative measure called STR Friendliness was formed to draw hypotheses on the relationships between the regulation and relevant socioeconomic indicators. The paper hypothesizes that (1) the regulation has negative impacts on the proliferation of short-term rentals and housing occupation (2) but not necessarily on the increase in home prices and rents, and that (3) the regulation tends to be stricter in cities where the lodging industry contributes to the local economy to greater extents (4) as well as in cities where the criticism of short-term rentals as a cause of rent increase is louder regardless of the actual rent increase. These hypotheses will facilitate future empirical studies of the regulation.

Determinants of housing prices: evidence from Ontario cities, 2001-2011

Determinants of housing prices: evidence from Ontario cities, 2001-2011

Variations in Park Facility Valuations across Neighborhoods

The obesity epidemic has renewed policy interest in provision of physical activity-enhancing park facilities. Public health researchers have noted variability in physical activity levels associated with different types of facilities. We assess the hedonic valuation of different types of park facilities. For homes located ¼ mile from the nearest park, the hedonic value of a 1/10 mile improvement in proximity ranges from an 1.3 % increase in home price in African American neighborhoods to a 0.3 % price reduction in “average” neighborhoods. Similar variation occurs across the home price distribution, park facilities, and neighborhood characteristics. Park funding implications are discussed.

The Effect of Housing Wealth on College Choice: Evidence from the Housing Boom

The higher education system in the United States is characterized by a large degree of quality heterogeneity, and there is a growing literature suggesting students attending higher quality universities have better educational and labor market outcomes. In this paper, we use NLSY97 data combined with the difference in the timing and strength of the housing boom across cities to examine how short-run home price growth affects the quality of postsecondary schools chosen by students. Our findings indicate a $10,000 increase in a family's housing wealth in the four years prior to a student becoming of college-age increases the likelihood she attends a flagship public university relative to a non-flagship public university by 2.0 percent and decreases the relative probability of attending a community college by 1.6 percent. These effects are driven by relatively lower and middle-income families. We show that these changes are due to the effect of housing wealth on where students apply, not on whether they are admitted. We also find that short-run increases in home prices lead to increases in direct quality measures of the institutions students attend. Finally, for the lower-income sample, we find home price increases reduce student labor supply and that each $10,000 increase in home prices is associated with a 1.8% increase in the likelihood of completing college.

Was the U.S. Crisis a Financial Black-Hole?

This paper argues that the U.S. crisis is a new type of crisis: a financial black hole. Financial black-holes are characterized by the breaking-up of credit market discipline and the large-scale financing of negative net present value projects. In a theoretical model, the paper explains how the interaction of perceived government guarantees and the ability to issue catastrophe-bond-like liabilities generates black-holes. The paper then shows that key facts of the recent U.S. crisis can simultaneously be rationalized by the black hole equilibrium: Between 2003 and 2006, the origination of catastrophe-loan type mortgages exploded, as well as the issuance of 'Private Label' mortgage-backed securities that helped off-load them into the market. During the same period, there was a massive increase in the origination of mortgages to borrowers with limited repayment ability, absent a continuous increase in home prices. While this situation should have led to an upward repricing of the risk associated with Private Label MBS, the contrary occurred and the spread on these securities actually declined. While each of these facts in isolation can be interpreted differently, the strength of the black-hole explanation is its ability to account for the combination of these key facts.

Housing policy in the wake of the crash

In this article the author examines aspects of U.S. housing policy in the aftermath of the global financial crisis of 2008-09. The author notes that between the years 2000 and 2010 the U.S. housing market underwent extremes of prosperity and financial failure as home prices rose precipitously, and then fell following the financial crisis. A number of topics are addressed including fluctuations in the construction industry, the sharp increase in home prices in Las Vegas, Nevada, and Phoenix, Arizona, and the tax deduction for mortgage interest on homes.