House Price Moments in Boom-Bust Cycles

Todd Sinai

Chapter in NBER book Housing and the Financial Crisis (2013), Edward L. Glaeser and Todd Sinai, editors (p. 19 - 68)
Conference held November 17-18, 2011
Published in August 2013 by University of Chicago Press
© 2013 by the National Bureau of Economic Research

This chapter describes empirical patterns in real house prices in the United States over the last three decades. It highlights six stylized facts. First, despite the sizable boom-bust pattern in house prices at the national level, individual housing markets in the United States experienced considerable heterogeneity in the amplitudes of their cycles. Second, the boom-bust of the 2000s bears remarkable similarities--as well as some differences--to the boom-bust of the 1980s. Third, housing markets also experienced differences in the timing of their cycles. Fourth, the largest booms and busts, and their timing, seem to be clustered geographically, with the largest amplitude cycles in the boom/bust of the 1990s and 2000s occurring in coastal metropolitan statistical areas (MSAs) in Florida. Fifth, other interesting patterns emerge when one considers annual house price growth, rather than house price changes from trough to peak and back again. Lastly, these five patterns remain even when house prices are purged of demand fundamentals such as rents, incomes, or employment.

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This chapter first appeared as NBER working paper w18059, House Price Moments in Boom-Bust Cycles, Todd M. Sinai
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