Real Estate Price Changes Research Articles

Preference dynamics and risk-taking incentives

This study explores the relationship between executive compensation and the preference dynamics of managers and shareholders. Our analysis centers on the theoretical prediction that changes in firms' asset value can differentially affect the risk-taking preferences of the two groups, potentially influencing the optimal compensation policy. Utilizing local real estate price changes to identify variations in firms’ asset value, we find that a decrease in asset value leads to more risk-taking incentives in compensation, and this effect is more pronounced in firms that are more likely to be influenced by the hypothesized mechanisms. In the second empirical setting, we provide corroborating evidence using a natural experiment involving disaster-induced negative shocks to the firm fundamentals. Collectively, our findings suggest that the design of compensation contracts facilitates incentive alignment by incorporating the dynamic preferences of the contracting parties.

Analysis of China's Real Estate Market Volatility and Financial Stability

Fluctuations in China's real estate market profoundly affect the economy, the financial system and social stability. Effective policy regulation, including the adjustment of monetary policy and the control of speculative behavior, is essential to mitigate market volatility and reduce financial risks. This paper uses the historical data analysis method and literature research method to conduct research and analysis based on the study of the meaning of financial stability. Firstly, it divides the historical fluctuation of China's real estate market into four stages and explores the characteristics and causes of real estate price changes in each stage. Thus, the historical fluctuation pattern of China's real estate market and the mechanism by which real estate market fluctuations affect financial stability are derived. The mechanism by which real estate affects financial stability through the personal wealth channel, the balance sheet channel, and the liquidity channel is explored. The findings of this paper can provide a basis for government decision-making and guide real estate practitioners and investors to grasp market fluctuations and avoid potential risks.

텍스트 네트워크 분석을 이용한 『대한부동산학회지』 게재논문의 연구경향

This study examined the research trends by period through content analysis and text network approaches of 747 papers published in the Journal of the Korean Real Estate Society. As a result, in the case of each thesis publication, it was confirmed that the status of the academic society was established as a convergent research platform for real estate industry, as well as academia and research. The topics of each field of published papers were in the order of “Real Estate investment,” “Real Estate development,” “Real Estate policy,” “Real Estate finance,” and “Real Estate management.” It is analyzed that the complexity of the Real Estate market and Real Estate phenomena was reflected in Real Estate research as the times progressed. In addition, as research approaches have diversified and quantified with the expansion of thesis topics, it has recently been confirmed that the phenomenon of the real estate market that combines Real Estate and IT technologies such as proptech and Bitcoin has also been reflected. In addition, research trends and directions were analyzed by period, and research keywords related to housing instability caused by changes in real estate prices were identified in in-depth studies and convergence studies. As the times changed, it was confirmed that the subject and research trend of the published paper of the Korean Real Estate Society continued to expand, and the direction the Korean Real Estate Society should pursue in the future was also confirmed in terms of the role of the society to find answers to find answers to real estate problems.

Real estate price forecasting based on fundamental analysis

Real estate economy is an important pillar of China's economy, where the real estate prices are the key factors influencing the economic development of real estate. Based on the analysis of real estate price changes, this study digs into the elements of real estate economic fluctuations and predict the factors of housing prices. Based on the evaluations, it will have a positive role for the government, enterprises, individuals to formulate regulation measures, adjust the investment strategy. According to the analysis, real estate prices have varying dramatically owing to various factors, e.g., policies, population and family size, consumer psychological needs, war, social and environmental factors. It is demonstrated by estimation that the prices of real estate can be controlled in a reasonable range by making scientific and reasonable real estate market regulation policy, so as to ensure the security of real estate finance. These results shed light on guiding further exploration of real restate regulation.

The Effects of Apartment Price Changes on Residents’ Settlement Consciousness in Seoul

The purpose of this study is to analyze the impact of real estate price changes in Seoul on residents’ settlement awareness. In addition, this study tried to figure out whether pride as a Seoul citizen has the effect of controlling the relationship between apartment prices and residential consciousness. To this end, the panel analysis was conducted from 2013 to 2017 based on the results of the survey of urban policy indicators in Seoul Survey and the housing price trend data of KB Kookmin Bank. According to the analysis, residents’ settlement awareness in areas where apartment prices are high is rather low. However, if you have a strong sense of pride as a Seoul citizen, you can also check the adjustment effect of relatively high settlement awareness even if apartment prices rise. Although various studies have been conducted on factors affecting residents’ settlement awareness, this study is meaningful in that it analyzed the relationship between apartment prices and settlement consciousness, which is a real economic factor. In line with the central government’s real estate stabilization policy, local governments should focus on efficient policies to curb soaring real estate prices.

The Relationship between Income Instability and Psychological Condition of Real Estate Price Changes and Willingness to Adjust Real Estate Holding Ratio

The Relationship between Income Instability and Psychological Condition of Real Estate Price Changes and Willingness to Adjust Real Estate Holding Ratio

Can Web Search Queries Predict Prices Change on the Real Estate Market?

This study aims to explore whether the intensity of internet searches, according to the Google Trends search volume index (SVI), is a predictor of changes in real estate prices. The motivation of this study is the possibility to extend the understanding of the extra predictive power of Google search engine query volume of future housing price change (shift direction) by (i) the introduction of a research approach that combines the advantages of the complementary use of cross-correlation analysis and machine learning classification algorithms; (ii) applying the multi-class HPI values classifier which allows predicting the housing price increase, decrease or relative stability; (iii) exploiting the SVI that relates to interests in both ‘real estate’ and ‘credit to buy real estate’; (iv) evaluation of the introduced approach in the context of the Polish real estate market. The main theoretical contribution of our work is a confirmation that the freely available information regarding Google user searches can provide an in-depth insight into enriching the generally accepted statistics on supply and demand in the real estate market. From the practical perspective, this research confirms that SVI can be associated as a sole determinant to anticipate the housing price change with time-lag sufficient for making decisions regarding the purchase (sale) of individual property or the real estate market control. Such findings can be also helpful for researchers who intend to use Google Trends data as an extra variable from demand side to improve the prediction accuracy if it is included in the model which is based on the existing housing prices determinants.

Research on Real Estate Wealth Effect under the Background of Double Cycle Based on VAR Model

In order to cope with the complex and severe development situation at home and abroad, in May 2020, the Party Central Committee proposed to accelerate the formation of a new development pattern with the domestic cycle as the main body and the mutual promotion of the domestic and international double cycles. Among them, the consumption of Chinese residents is a “double cycle” key part of strategy. From the perspective of consumption structure and property structure, real estate is an important part of household property and an important consumer object in China and it has a decisive influence on the effect of internal circulation. By constructing a real estate wealth effect model, this paper adopted the impulse response function method based on the VAR model, studies the changes in real estate prices, residents’ incomes, and residents’ consumption. The results show that the three interact with each other. In the long run, real estate has a positive wealth effect, but in the short term, there is a negative wealth effect, and consumers’ expectations of future housing prices will affect current consumption changes. In order to promote the domestic cycle, the author proposes to develop and improve the primary and secondary housing markets to ensure the liquidity of real estate, thereby stimulating consumption; guide residents to form healthy real estate price expectations, prevent large fluctuations in housing prices, and strictly stabilize consumption; the policy positioning of “no speculation” reduces the crowding-out effect of investment and speculative house purchases on residents’ daily consumption, thereby increasing consumption.

Real effects of real estate: evidence from unemployment rates

PurposeThis paper aims to investigate the relationship between residential real estate prices and unemployment rates at the Metropolitan Statistical Area (MSA) level.Design/methodology/approachThis paper uses a long time-series of MSA-level quarterly data from 1990 to 2018. It uses an instrumental variable approach to estimate the effects of residential real estate prices on unemployment rates using the geography-based land constraints measure of Saiz (2010) as the instrument.FindingsThe results show that changes in residential real estate prices do not have a causal effect on unemployment rates in the same quarter. However, it takes 9-12 months for an increase (decrease) in real estate prices to decrease (increase) unemployment rates. This effect is significant during both pre- and post-financial crisis periods and robust to control for the economic characteristics of MSAs.Research limitations/implicationsThis paper contributes to the emerging literature that studies the real effects of real estate. Particularly, the methodology and the findings can be used to investigate causal relationships between housing prices and small business development or economic growth. The findings are also of interest to policymakers and practitioners as they illustrate how and when real estate price shocks propagate to the real economy through unemployment rates.Practical implicationsThis study’s findings have important implications for academics, policymakers and investors as they provide evidence of a snowball effect associated with shocks to real estate prices: increasing (decreasing) unemployment rates following a decrease (increase) in real estate prices exacerbates the real estate price movements and their economic consequences.Originality/valueThis paper analyzes a significantly longer period, from 1990 to 2018, than the existing literature. Additionally, it uses the MSA-level land unavailability measure of Saiz (2010) as an instrument to explore the effects of residential real estate prices on unemployment rates and when those effects are observed in the real economy.

Practical Applications of Real Estate Returns

Practical Applications In Real Estate Returns, from the Fall 2020 issue of The Journal of Alternative Investments, authors Jack Clark Francis (Baruch College) and Roger G. Ibbotson (Yale University) compare real estate investment returns to those from traditional investments like stocks and bonds. Their key focus is on real estate’s total returns—not just capital gains from rising land prices. The authors find that during the study period (1991–2018), farmland had an annualized total return of 11.4%—outperforming stocks—while residential real estate returned 9.0% and commercial real estate returned 8.5%. Most importantly, they find that rents provide the majority of investment returns from all real estate. They therefore warn investors and financial advisors not to base their investment decisions solely on how much real estate prices go up. However, they say real estate investment risk is hard to gauge because the methods used to track real estate price changes cause artificial smoothing. Real estate’s performance also shows a low correlation with that of stocks and bonds—so financial advisors and institutional investors may wish to consider adding real estate to traditional investment portfolios to help with diversification. TOPICS:Real estate, performance measurement

Financial capacity and the demand for audit quality

Prior research documents that financial capacity could be positively or negatively associated with the demand for audit quality. We re-examine this relation using changes in local real estate prices as exogenous shocks to corporate financial capacity. Using auditor size, auditor industry specialisation, and auditor fees as measures of audit quality, we find robust evidence that an increase (decrease) in financial capacity significantly reduces (increases) the demand for audit quality, and that this relation is more pronounced when firms are more financially constrained, when external monitoring by institutional investors and financial analysts is weaker, and when there is more negative news about real estate price changes. Our study enriches the related literature by describing a more complete and dynamic relationship between audit quality and financial capacity.

Transport Mode and the Value of Accessibility–A Potential Input for Sustainable Investment Analysis

Accessibility plays an essential role in determining real estate prices and land use. An understanding of how accessibility and changes in accessibility influence real estate prices is key to making decisions regarding investments in infrastructure projects. From an accessibility point of view, it is not clear that there should be differences in valuation depending on the mode of public transport, road, or rail. There are, however, other differences that may affect real estate prices differently. For example, railway stations more often than bus stations, tend to be associated with a higher level of service. In addition, an investment in a railway station may signal a long-term decision from the policymaker. A third possible explanation concerns differences in perceived safety, comfort, and security. This paper aims to study if and how capitalization of accessibility differs between modes of transportation. The findings indicate that rail has a higher impact, both for single-family and multifamily houses. The implication of these findings may be of importance for future infrastructure investments and their corresponding cost-benefit analyses. Incorrect valuations of the benefits of infrastructure investments may result in sub-optimal investments.

Financial Capacity and the Demand for Audit Quality

Prior research documents that financial capacity could be positively or negatively associated with the demand for audit quality. We re-examine this relation using changes in local real estate prices as exogenous shocks to corporate financial capacity. Using auditor size, auditor industry specialization, and auditor fees as measures of audit quality, we find robust evidence that an increase (decrease) in financial capacity significantly reduces (increases) the demand for audit quality, and that this relation is more pronounced when firms are more financially constrained, when external monitoring by institutional investors and financial analysts is weaker, and when there is more negative news about real estate price changes. Our study enriches the related literature by describing a more complete and dynamic relationship between audit quality and financial capacity.

Effects Of Exchange Rate Volatility On Real Estate Prices In Developing Economies, A Case Of Ghana

This study aims to find out whether exchange rate volatility affects real estate domestic house prices in Ghana. To this end, a 32 years secondary data from World Development Indicators (WDI) and data from Real Estate Developers in Ghana are employed for the study. The study employs Autoregressive distributed lags (ARDL) bounds testing of cointegration t o test the null hypothesis that exchange rate volatility has n o impact on real estate housing prices. The study finds that real estate price is cointegrated with remittances, exchange rate and inflation. The long run equilibrium is stable and significant. Exchange rates d o not cause changes in real estate prices in both short and long run. Similarly past prices of real estate d o not have impact on current house prices. Rather, remittances positively cause real estate prices. Inflation on its part has a negative impact on real estate prices. It is therefore concluded that, volatility in the exchange rate between the cedi and other trading currencies does not predict changes in real estate prices.

Hedonic Price Ripple Effect and Consumer Choice: Evidence from New Homes

This study uses the hedonic price model to examine the determinants of house prices. It employs kernel density to estimate the spatial weight matrix and conducts spatial econometrics and instrumental variables quantile regression analysis. Taking a new building in Shanghai city as an example, this micro-perspective study shows that hedonic prices of houses are derived from consumer hedonic preferences and their changes in terms of inertia and spatial ripple effects. However, there are large differences in the drivers of the same hedonic attribute across quantile degrees. With house prices gradually decreasing from the city center to the surrounding areas, the ripple effect is significant in determining residents’ preferred consumption characteristics and presents several inverted U-shaped and inverted U-shaped relationships. Residents’ preference for housing consumption is mainly reflected in the average area of the house, property fee, location of the administrative area, and so on. Regional real estate price changes are mainly reflected in hedonic house prices, and real consumer demand for housing is mainly derived from hedonic preference. Therefore, government regulation and control of house prices should consider different regions and different consumer groups simultaneously.

Asset concentration in the US agricultural balance sheet: a relative information approach

PurposeOver the past four decades, real values of farm real estate and the share of assets on farmers’ balance sheets attributed to farm real estate have increased. The purpose of this paper is to examine the factors that explain the concentration of the US agricultural balance sheet around a particular asset, farm real estate, and the extent to which the degree of asset concentration varies across United States Department of Agriculture production regions.Design/methodology/approachState-level data from 48 states and entropy-based inequality measures are used to examine changes in asset distributions (real estate vs non-real estate assets) both within and between regions over time.FindingsThe agricultural balance sheet is found to concentrate into real estate in the USA over the period 1960-2003 with the rate of concentration varying across production regions. In some regions, the concentration is mainly due to changes in real estate prices, while in other regions concentration is also driven by changes in real estate holdings or changes in total factor productivity.Originality/valueThis study formally estimates the degree to which the concentration of balance sheet items can be explained by the observed changes in farm real estate prices relative to observed changes in agricultural factor productivity or changes in farm real estate holdings. The computed regional differences in asset concentration and its main drivers have implications for changes in equity and solvency positions of farmers as well as agricultural lenders’ risk exposure.

The Crowding-Out Effects of Real Estate Shocks Evidence from China

We investigate the impacts of real estate price changes on firms’ investment and financing using detailed real estate transaction data in China. China witnessed the real estate prices rise for more than a decade and recent housing purchase restriction policies enforced in 46 cities generated negative price shocks. Using both IV and DID approaches, we document that the rising real estate price causes land-holding firms to borrow more and invest more while the policy shocks work in the opposite direction. Further decomposition of investment into land and non-land investments shows that the rising real estate prices cause firms to only increase investment in land, especially commercial land, while decrease non-land investment. We next focus on a sub-sample of non-land owners and show that these firms borrow less and invest less if they are affected more by real estate price rise and the effects are reversed due to policy shocks. The results are consistent with the existence of a crowding-out effect. First, rising real estate price fosters more investment into the real estate sectors, which crowds out non-real estate investment. Second, rising real estate price enlarges the financial constraint gaps between firms with land and firms without land, which cause resource misallocation. To understand the aggregate effect, we investigate investment efficiency changes. We show that the increased investment associated with land price rises in fact reduces investment efficiency while policy shocks improve investment efficiency. The evidence showing that net effect would be negative calls for caution in the policy debate that advocates for investment stimulation through real estate boom.

Urban transformation: Effects of large housing investments on nearby property values in Atasehir Istanbul

Rapid growth and land use development stimulates urban transformation and results in changes in real estate prices in developing countries. In addition, since the mid-1990s there has been a shift in the governance of urban land and large housing markets in Turkey in the direction of neoliberal policies. As urban space becomes the most profitable source of investment and as cities adopt aggressive place marketing strategies, it is becoming difficult for average urbanites to own their living space because of increased real estate values. Large housing investments are seen as mechanisms through which neoliberal policies are implemented in urban areas. This study investigates the effect of large housing projects on nearby property values in Istanbul. The changes in average land prices in the nearby neighbourhoods of a large housing investment are investigated throughout different time periods. These changes signal a shift to the neoliberal policy that extends market forces to all domains of social life. Urban transformation can be viewed either as detrimental to the overall quality of urban life or as a positive force in cities today. Either view is usually dependent on what socio-economic group is chosen. What has taken place around Atasehir might also be termed as gentrification. A comparison of the changes in land prices in the nearby neighbourhoods and other neighbourhoods in better locations illustrates that the difference in the nearby neighbourhoods is higher than in the other neighbourhoods. The results of the study can be useful for urban planners, investors and policy makers.

Similarities in Time-Series of Housing Prices on Local Markets in Poland

Abstract This study examined similarities between local real estate markets in Poland from 2006 - 2013 by analyzing changes in housing prices. The analyses covered five cities - all of which are major centers of their regions: Warsaw (Mazovia - the center of Poland), Bialystok (Podlasie - the east of Poland), Cracow (Malopolska - the south of Poland), Poznan (Wielkopolska - the west of Poland) and Gdansk (Pomerania - the north of Poland). The time period was chosen so that it covered an interval of rapid changes in real estate prices (a housing bubble) and their subsequent relaxation to the equilibrium state. Firstly, a multi-dimensional analysis which took into account the Chebyshev distance was employed. This helped to conduct an analysis of the correlation of price changes over time, which revealed their concurrence and, moreover, showed specific propagation delays to external stimuli, and hence could be a measure of the market’s inertia. The degree of integration of the local markets under study changed only slightly over time; therefore, a thesis can be put forth in regard to the interrelation of local real estate markets, imagined as a system of communicating vessels. In the second stage, the damped harmonic oscillator model was employed to describe the observed evolution of real estate prices. This study exhibited high inertia in real estate markets, manifested during rapid structural changes in the system’s state occurring in conditions far from equilibrium. In long-term evolution, the pace of change is slow enough for the systems to remain close to equilibrium

A Straightforward Approach to Estimate the Abnormal Return in Taiwan

The fluctuation of real estate prices has been a subject of public attention, and related studies are often unable to effectively measure changes due to limitations in information acquisition and modeling. In fact, the existence of abnormal return of the real estate market can be regarded as an important indicator of fluctuations in prices or a bubble. Therefore, based on the Capital Asset Pricing Model, combined with time series analysis, this paper establishes a more convenient method of analysis to explore price changes of Taiwan's real estate market from 1998 to 2012. The empirical results show that there is no abnormal return in Taiwan's overall real estate price changes. However, in major metropolitan areas, abnormal return does exist, and such a trend became more evident after the financial tsunami. By region, the abnormal return rate of New Taipei City has become gradually higher than Taipei City. The findings are consistent with the recent development of the real estate market of the Taipei region, and thus, are worth the attention of the government and relevant sectors.