Dynamic Residential Housing Cycles Analysis

Dynamic Residential Housing Cycles Analysis This paper develops and tests a theoretical model for residential housing market cyclical dynamics. The model employs an interactive supply and demand framework to engender housing price dynamics. Under our set of assumptions, the two equation system is econometrically identified: the first equation, housing demand, relates rent, property values, and capitalization rates with demand fundamentals. The second equation, housing supply, relates housing investment and property values with supply fundamentals. Using the model, we analyze empirically the cyclical dynamics for residential properties in Los Angeles, San Francisco, San Diego and Sacramento for the 1988–2003 time period. The theoretical and econometric design represents improvements and/or modifications of previous studies in at least four ways. First, many of the earlier commercial cyclical analyses have focused on office appraisal and have relied on sparse transactions data, which are likely to be less reliable than the copious amount of residential transactions data. Second, the cyclical volatility and timing of single-family housing is different than that of commercial real estate. Third, by examining different local MSA markets in California, our study distinguishes and isolates national-macro, regional and local market variable effects upon cycles. Finally, utilizing quarterly data (versus annual data) sharpens our ability to focus upon cyclical behaviour. Our empirical analyses suggest that fundamentals, such as employment growth and interest rates are key determinants of the residential real estate cycles. However, in general, local fundamentals tend to have greater cyclical impacts than those of national or regional fundamentals. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

Dynamic Residential Housing Cycles Analysis

Loading next page...
Springer US
Copyright © 2007 by Springer Science+Business Media, LLC
Economics; Regional/Spatial Science; Financial Services
Publisher site
See Article on Publisher Site


You’re reading a free preview. Subscribe to read the entire article.

DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches


Start Free Trial

14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.



billed annually
Start Free Trial

14-day Free Trial