TY  - JOUR
AU  - Case,Karl E.
AU  - Shiller,Robert J.
TI  - The Behavior of Home Buyers in Boom and Post-Boom Markets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2748
PY  - 1989
Y2  - August 1989
UR  - http://www.nber.org/papers/w2748
L1  - http://www.nber.org/papers/w2748.pdf
N1  - Author contact info:
Karl E. Case
Wellesley College
106 Central Street
Wellesley, MA 02481
E-Mail: kcase@wellesley.edu

Robert J. Shiller
Yale University, Cowles Foundation
Box 208281
30 Hillhouse Avenue
New Haven, CT  06520-8281
Tel: 203/432-3708
Fax: 203/432-6167
E-Mail: robert.shiller@yale.edu
AB  - A questionnaire survey looked at home buyers in May 1988 in two "boom" cities currently experiencing rapid price increases (Anaheim and San Francisco), a "post-boom" city whose home prices are stable or falling a couple years after rapid price increase (Boston) and a "control" city where home prices had been very stable (Milwaukee). Home buyers in the boom cities had much higher expectations for future price increases, and were more influenced by investment motives. The interpretations that people place on the boom are not usually related to any concrete news event; there are instead oft-repeated cliches about home prices. This suggests that sudden real estate booms have, at least in part, a social, rather than rational or economic, basis. There is evidence for excess demand in boom markets and excess supply in the post-boom market; there appear to be various reasons for this: notions of fairness, intrinsic worth, popular theories about prices, coordination problems, and simple mistakes.
ER  -