Residential Prices Research Articles

Genetic Programming Forecasting of Real Estate Prices of Residential Single-Family Homes in Southern California

Use of an artificial intelligence technique, genetic programming (GP), is introduced here to predict real estate residential single-family home prices. GP is a computerized random search technique that can deliver regression-like models. Spatiotemporal model specifications of periodic average neighborhood prices are implemented to predict individual property prices. Average price variations are explained in terms of changes in home attributes, spatial attributes, and temporal economic variables. Quarterly data (2000-2005) from two cities in Southern California are utilized to obtain GP and standard statistical models. The results suggest that forecasts from city neighborhood average price GP equations may have an advantage over forecasts from GLS equations and over forecasts from models estimated using city aggregated data.

The impact of restructuring and deregulation on gas rates

This article evaluates the impact of consumer choice programs, price caps, and sliding scale plans on consumer prices of gas using a custom survey of public service commissions and data from the Department of Energy. A seemingly unrelated regressions model estimates residential, commercial and industrial prices jointly, controlling for potentially endogenous demand. Consumer choice programs are estimated to lower residential and commercial prices significantly, by bringing competition to markets with smaller consumers. Prices fall even before deregulation as utilities build consumer loyalty and fight competition. Sliding scale plans are estimated to lower prices of small consumers while raising industrial prices. Price caps lead to overall higher prices, with unclear ranking across consumer classes.

Trends in prices to commercial energy consumers in the competitive Texas electricity market

To date, the price of electricity to commercial or business energy consumers has generally increased at greater rates in the areas of Texas where retail competition has been introduced than in areas that do not enjoy competition. Trends in commercial competitive prices have largely mirrored trends in residential prices. Market restructuring has tended to increase the sensitivity of retail electricity prices to changes in the price of natural gas, the marginal fuel used for generation in Texas. Consequently, the rapid increases in the commodity price of natural gas following restructuring led to increases in competitive electric rates which exceeded the increases in areas not exposed to restructuring, where the fuel component of electric rates tend to reflect a weighted average of the utilities’ fuel costs. There is some evidence that pricing behavior by competitive retailers changed when the retailers affiliated with the incumbent utilities were permitted some pricing flexibility, resulting in a reduction in prices.

Spatial Analysis of Residential Prices in Istanbul

The purpose of this paper is to examine the spatial distribution of housing prices at the metropolitan and at the district level of Istanbul. At the metropolitan level, the most important factors which affect housing prices are sub-market, floor area and sea view. At the district level, housing prices vary from district to district according to locational, socio-economic and property characteristics. High-income sub-markets have higher coefficient of determinations and more significant variables than low-income sub-markets. Furthermore, the results suggest that planned districts have higher housing prices; thus, restructuring squatter areas and revitalizing inner city areas provide not only benefits to individuals but also higher tax revenues to the city.

The Cyclical Association of Residential Housing Price and Consumption

Executive Summary.This paper develops a theoretical framework to investigate private consumption changes that are brought about by the residential housing price effect, which in turn is envisaged to comprise the income effect, substitution effect, and expectation effect along with the residential price cycle. A frequency domainbased model that employs cross-spectra analysis is consistent with such a theoretical framework, and helps to validate it, as its model-free characteristics avoid the problems of model misspecification and parameter estimation error. In the Singapore context, the results show that residential price affects consumption significantly, depending on the time scale and frequency without a consistent sign. The expectation effect, operating through the capital gain effect, is important in explaining the residential price-consumption relationship and contributes more during the expansion period than the recession period.

Robust Inference for Measures of Persistence in Singapore Sectoral Property Price Indexes

This paper examines the pattern and persistence of changes in price indexes of Singapore private housing, office space, shop space and industrial properties. Unit root tests find convincing evidence of non‐stationarity in all four sectors' quarterly prices. However, more detailed analysis of the autoregressive coefficient estimate, using recently developed methods that are robust to near unit‐root possibilities, reveals clear differences between residential and the non‐residential property price indexes. Three distinct types of dynamic behaviour can be discerned, characterized by the shape of the empirical impulse response function. Only private residential prices are clearly non‐stationary. For shop space, a stationary model is indicated, while the remaining two categories – namely office space and industrial property – are more likely to be near‐unit root processes depicting a high degree of persistence. Further analysis reveals hump‐shaped empirical impulse responses in the office space and industrial property price series.

Consequences of Vertical Separation and Monopoly: Evidence from the Telecom Privatizations

Two common policy instruments used by governments around the world to increase the availability of basic telephony (i.e., local, long distance, and international service) have been: (1) award monopoly rights on basic services to cross-subsidize residential local telephony; and (2) separate vertically (i.e., structural separation) the owner of the local fixed network from the provider of long distance or international telephone services. I use data from a panel of 67 countries during the seven years following the privatization of the telephone monopoly and find that contrary to wide spread beliefs: (1) monopoly on basic services is not associated with lower residential telephony prices; quite the opposite, monopoly increases residential local prices; (2) monopoly does not help universal service provision and lowers the use of international telephony; and (3) mandatory vertical separation reduces international telephony usage and the number of fixed lines in service. In summary, monopoly and vertical separation harm those consumers that they were precisely designed to help: the downstream (business) users of international telephony and the upstream users of residential local telephony.

Consumer Preference Not to Choose: Methodological and Policy Implications

Residential consumers remain reluctant to choose new electricity suppliers. Even the most successful jurisdictions, four U.S. states and other countries, have had to adopt extensive consumer education procedures that serve largely to confirm that choosing electricity suppliers is daunting. Electricity is not unique in this respect; numerous studies find that consumers are generally reluctant to switch brands, even when they are well-informed about product characteristics. If consumers prefer not to choose, opening regulated markets can reduce welfare, even for some consumers who do switch, as the incumbent can exploit this preference by raising price above the formerly regulated level. Policies to open markets might be successful even if limited to industrial and commercial customers, with residential prices based on those in nominally competitive wholesale markets.

Consumer preference not to choose: Methodological and policy implications

Residential consumers remain reluctant to choose new electricity suppliers. Even the most successful jurisdictions, four US states and other countries, have had to adopt extensive consumer education procedures that serve largely to confirm that choosing electricity suppliers is daunting. Electricity is not unique in this respect; numerous studies find that consumers are generally reluctant to switch brands, even when they are well-informed about product characteristics. If consumers prefer not to choose, opening regulated markets can reduce welfare, even for some consumers who do switch, as the incumbent can exploit this preference by raising price above the formerly regulated level. Policies to open markets might be successful even if limited to industrial and commercial customers, with residential prices based on those in nominally competitive wholesale markets.

The effects of residential real-time pricing contracts on transco loads, pricing, and profitability: Simulations using the N-ABLE™ agent-based model

An agent-based model is constructed in which a demand aggregator sells both uniform-price and real-time price (RTP) contracts to households as means for adding price elasticity in residential power use sectors, particularly during peak-price hours of the day. Simulations suggest that RTP contracts help a demand aggregator (1) shift its long-term contracts toward off-peak hours, thereby reducing its cost of power and (2) increase its short-run profits if it is one of the first aggregators to have large numbers of RTP contracts; but (3) create susceptibilities to short-term market demand and price volatilities.

Residential price elasticity of demand for water

This paper presents an analysis on price elasticity of demand for water as a consequence of price increases. The objective of this research study is to estimate the residential price elasticities of demand for water for different regions, which may have different income levels. The general conclusion is that price elasticity for residential water use is inelastic (i.e. a given percentage of price increase results in a proportionally smaller decrease in quantity demanded) and it varies by consumer class and type of water use. The elasticity is not significantly affected by demographic and other factors.

The Petroleum Bomb

This article highlights the dependence on petroleum and its products for the major share of the world’s transportation fuel create special dangers in our time. These dangers are all driven by rigidities and pot entail vulnerabilities that have become serious problems because of the geopolitical realities of the early 21st century. Those who reason about these issues solely on the basis of abstract economic models that are designed to ignore such geopolitical realities will find much to disagree with in what follows. Although such models have utility in assessing the importance of more or less purely economic factors in the long run. The attractiveness to the consumer of being able to use electricity from overnight charging for a substantial share of the day’s driving is stunning. The average residential price of electricity in the United States is about 8.5 cents per kilowatt-hour.

Autoregressive analysis of Singapore's private residential prices

PurposeThe purpose of this paper is to examine the nature of Singapore's private housing market with respect to its price movement using time series models.Design/methodology/approachThis paper analyses the price dynamics in the Singapore private housing market using the integrated autoregressive‐moving average modeling coupled with outlier detection and autoregressive conditional heteroskedasticity modeling techniques.FindingsThe paper finds that private house prices are better modeled as an ARIMA (1, 1, 0) model with corresponding dummy variables. This suggests that housing prices may be characterized as the combination of a stationary cyclical component and a non‐stationary stochastic growth component over the past almost three decades. This affirms that the Singapore's private housing market is characterised by the weak‐form inefficiency.Research limitations/implicationsThe results show that even though ARIMA with dummy variables performs better to ARIMA with ARCH in dynamic performance, there is only marginal improvement on the original model. This suggests that the method for selecting intervention variables in the ARIMA modeling is worth further research with the aim of improving its predictive ability.Originality/valueThis paper incorporates the detection of outliers and intervention procedure in the modeling in order to analyse the impacts of extraordinary events such the recent Asian financial crisis and excessive market speculation on property prices and take them into consideration in forecasting price changes.

Impediments to the success of collective sales: lessons for the property consultant

PurposeThe paper aims to consider how collective sales may be achieved more effectively and speedily in the Singaporean context.Design/methodology/approachThrough an examination of Singaporean legislation, cases, market conditions and the residential price index, a range of factors has been identified as affecting the success rate of collective sales.FindingsThe paper shows that in the face of radical legislation that aimed to facilitate collective sales, there were various other factors that impeded the success rate of collective sales. Some of these factors were within the control of parties, whereas some were not.Practical implicationsThe paper points to the flashpoints in the collective sale process which property consultants can be mindful of during negotiations. Suggestions are made for the property consultant to adopt mediation techniques to expedite the process. This will result in time and cost savings for the parties involved.Originality/valueThe paper highlights the interplay of various factors other than legislation to facilitate collective sales. The paper will be of particular value to property consultants involved in negotiating collective sales, and owners of strata titled properties who wish to engage in collective sale of their development.

An exploratory study of the impact of common land-use policies on air quality

An exploratory simulation model is developed to examine the effects of land-use policies on transportation activities and vehicle emission. It is assumed individuals choose to live among 3 zones in each of two neighboring cities and commute to work by auto. Residential choice is assumed to be the result of optimizing transportation and housing costs. Vehicle emissions are modeled as a function of each city’s population, trip length and route capacity. Three scenarios are constructed to investigate the combined effects of land-use policies and other common polices such as rent control and control of land supply measures on changes in vehicle emissions. The results indicate that mixing residential and business uses in one city may result in residential price increases, and thus displace incumbent residents to a neighboring city. The displacement may create a net increase in vehicle emissions if the new route to work is more congestion-prone and has lower capacity than the old route. Displacement, and hence vehicle emissions tend to increase when the price responsiveness of residential demands in both neighboring cities are comparable. We also examine the impacts from two other common polices such as rent subsidies programs and control of land supply. It is found that these policies, if implemented together with land-use polices may exacerbate the displacement of residents to other housing markets. In light of the results, it is important for the policy makers to take into account of residential mobility in evaluating the effectiveness of any land-use policy aimed at reducing vehicle emissions.

The Market Response to Restructuring: A Behavioral Model

In this paper, I model the behavior of producers, consumers, and regulators in deciding to restructure the electricity sector and estimate their equilibrium response to the newly restructured market. The empirical model consists of simultaneous price and restructuring equations with endogenous switching and cross-equation correlation in the errors. This approach allow me to account for the influence of special interest groups and potential selection bias in which countries choose to restructure. I estimate distinct shifts from restructuring in both industrial and residential prices, and for English speaking, Scandinavian, and South American countries. I find that in all countries, it is industrial consumers that experience the price effects of restructuring, while residential consumers remain largely unaffected. In English speaking and Scandinavian countries, industrial prices decrease while in South American countries they increase. This is consistent with the political–economic environment in which these countries have considered restructuring.

Determinants of housing prices in Spanish cities

Residential price levels in Spain vary broadly among markets. Real estate theory explains that prices depend on market characteristics such as vacancy level, land availability, construction supply elasticity to respond to high or low speed to changes on the demand, as well as potential for economic growth, industrial and services activities located inside urban areas, etc. An analysis of prices in Spanish main cities shows that tensions appear to exist in some of them where economic activity shows different dynamism and price level appears to be independent of it. This paper tries to find evidence of the existing relationship between residential prices and economic and demographic factors that are demand determinants such as wages, migrations and productive structure, among others, to explain price formation in Spanish cities. It uses panel data and GLS methodology applied to 71 main Spanish province capitals and cities with more than 100,000 inhabitants. The results show evidence of determinants of housing prices and how some relationships appear to exist between price levels and families’ waged income as well as with population and productive structure in Spanish cities.

The impact of Seoul's subway Line 5 on residential property values

This research investigates the impact of the construction of a new subway line (Line 5) in Seoul on nearby residential property values. A hedonic pricing model shows that distance from a Line 5 subway station had a statistically significant effect on residential prices only prior to the line's opening. This is consistent with the anticipatory effect observed in other studies. Moreover, accessibility to transit had, in general, less of an impact on house prices than other variables such as the size of the unit, the quality of the school district, proximity to the high-status Kangnam subcenter, and possibly accessibility to recreational resources.

Property Value Impacts of an Environmental Disamenity

The purpose of this paper is to quantify the property value impacts of a change in environmental quality by using the hedonic price model. In particular, we focus on the impact of the presence of landfills on nearby residential real estate prices. We combine elements of an urban location choice and hedonic pricing model to estimate the effects of the presence of multiple environmental disamenities on residential real estate prices. We explicitly account for temporal effects by including housing transactions in areas with both open and closed landfills, and control for information effects. In addition, we treat property taxes and prices as being simultaneously determined. Our analysis suggests that closing landfills will not necessarily mitigate property value impacts.

The Problem of Identifying Land Use Spillovers: Measuring the Effects of Open Space on Residential Property Values

development, such as traffic congestion and air pollution. Several willingness-to-pay studies have demonstrated the positive amenity value of open space (Halstead; Beasley, Workman, and Williams), but evidence of the value of open space from revealed preference methods--namely, from hedonic models--is limited and mixed. In this article, we consider the issue of estimating open space spillovers using a hedonic pricing model with residential property sales and offer an explanation for why the positive amenity value of open space effects, even if it exists, may not always be empirically detected. The estimation problems that we consider are ones of identification, which arise in a hedonic residential price model when the open space land is privately held and developable.1 Under these circumstances, land parcels counted as open space are part of the market for residential land and therefore subject to the same economic forces that determine a location's residential value.