Expectations and House Prices : an Exploratory Analysis

• Autorzy: Michał Głuszak , Małgorzata Rymarzak
• Języki publikacji: EN

Abstrakty

EN

Purpose: Economic theory, as well as numerous empirical evidence coming from various countries suggest that market sentiments have a significant impact on the house price dynamics.
Methods: In the research we explore the formation of beliefs regarding the past house price dynamics and expectations about future house price developments in Krakow from 2009 to 2018. In the paper we use house price expectations data coming from a housing survey. To investigate the role of socio-economic characteristics on prediction accuracy we estimated two logit models, for beliefs and expectations, respectively.
Findings: The findings suggest that in most of the years respondents were able to predict roughly the house price dynamics in the study period, nonetheless the residential property market in Krakow was mostly stagnant in that period, and few rapid changes were observed. Respondents failed to foresee changing dynamics of the residential property market in 2014. We did not observe that simple demographic and economic traits, like age and income, correspond with agents' success in predicting house price movement.
Research implications: The study is the first attempt to explore beliefs and expectations of house buyers in Poland, and one of few research papers on of house price expectation formation in Central Eastern European countries. (original abstract)

Słowa kluczowe

EN

Real estate prices; Real estate market; Expectations; Questionnaire survey

PL

Ceny nieruchomości; Rynek nieruchomości; Oczekiwania; Badania ankietowe

• Czasopismo: Świat Nieruchomości
• Rocznik: 2019
• Numer: nr 4(110)
• Strony: 15--28

Twórcy

autor

Michał Głuszak

• Cracow University of Economics, Poland

autor

Małgorzata Rymarzak

• University of Gdansk, Poland; Delft University of Technology, The Netherland

Bibliografia

• Abildgren, K., Hansen, N.L., & Kuchler, A. (2018). Overoptimism and House Price Bubbles. Journal of Macroeconomics, 56, 1-14. https://doi.org/10.1016/j.jmacro.2017.12.006.
• Acedański, J., & Włodarczyk, J. (2016). Dispersion of Inflation Expectations in the European Union During the Global Financial Crisis. Equilibrium. Quarterly Journal of Economics and Economic Policy, 11(4), 737-749. https://doi.org/10.12775/EQUIL.2016.033.
• Ampudia, M., & Mayordomo, S. (2018). Borrowing Constraints and Housing Price Expectations in the Euro Area. Economic Modelling, 72, 410-421. https://doi.org/10.1016/j.econmod.2018.02.015.
• Bailey, M.C., Davila, E., Kuchler, T., & Stroebel, J. (2017). House Price Beliefs and Mortgage Leverage Choice. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3001866.
• Bolt, W., Demertzis, M., Diks, C., Hommes, C., & van der Leij, M. (2019). Identifying Booms and Busts in House Prices under Heterogeneous Expectations. Journal of Economic Dynamics and Control, 103, 234-259. https://doi.org/10.1016/j.jedc.2019.04.003.
• Bruine de Bruin, W., van der Klaauw, W., & Topa, G. (2011). Expectations of Inflation: The Biasing Effect of Thoughts about Specific Prices. Journal of Economic Psychology, 32(5), 834-845. https://doi.org/10.1016/j.joep.2011.07.002.
• Carroll, C.D., Fuhrer, J.C., & Wilcox, D.W. (1994). Does Consumer Sentiment Forecast Household Spending? If So, Why? The American Economic Review, 84(5), 1397-1408. Retrieved on 10/10/2019 from: http://www.jstor.org/stable/2117779.
• Colasante, A., Palestrini, A., Russo, A., & Gallegati, M. (2017). Adaptive Expectations versus Rational Expectations: Evidence from the Lab. International Journal of Forecasting, 33(4), 988-1006. https://doi.org/10.1016/j.ijforecast.2017.06.003.
• Cukierman, A. (1986). Measuring Inflationary Expectations. A Review Essay. Journal of Monetary Economics, 17(28), 315-324. https://doi.org/10.1016/0304-3932(86)90035-8.
• Dominitz, J., & Manski, C.F. (2004). How Should We Measure Consumer Confidence? The Journal of Economic Perspectives, 18(2), 51-66. Retrieved on 10/10/2019, from: http://www.jstor.org/stable/3216890.
• Du, K. (2019). Investor Expectations, Earnings Management, and Asset Prices. Journal of Economic Dynamics and Control, 105, 134-157. https://doi.org/10.1016/j.jedc.2019.06.002.
• Gelain, P., & Lansing, K.J. (2014). House Prices, Expectations, and Time-Varying Fundamentals. Journal of Empirical Finance, 29, 3-25. https://doi.org/10.1016/j.jempfin.2014.05.002.
• Glaeser, L., & Nathanson, C.G. (2015). Housing Bubbles. [in:] G. Duranton, J. V. Henderson & W.C. Strange (Eds.), Handbook of Regional and Urban Economics, (1st ed., Vol. 5). Elsevier. https://doi.org/10.1016/B978-0-444-59531-7.00011-9.
• Głuszak, M. (2013). Sytuacja ekonomiczna oraz oczekiwania cenowe nabywców mieszkań w Krakowie. Biuletyn Stowarzyszenia Rzeczoznawców Majątkowych Województwa Wielkopolskiego, 4, 12-16.
• Granziera, E., & Kozicki, S. (2015). House Price Dynamics: Fundamentals and Expectations. Journal of Economic Dynamics and Control, 60, 152-165. https://doi.org/10.1016/j.jedc.2015.09.003.
• Hoffmann, M., Krause, M.U., & Laubach, T. (2012). Trend Growth Expectations and U.S. House Prices Before and after the Crisis. Journal of Economic Behavior and Organization, 83(3), 394-409. https://doi.org/10.1016/j.jebo.2012.02.020.
• Huang, X., Jia, F., Xu, X., & Yu shi. (2019). The Threshold Effect of Market Sentiment and Inflation Expectations on Gold Price. Resources Policy, 62(January), 77-83. https://doi.org/10.1016/j.resourpol.2019.03.014.
• Jacobsen, B., Lee, J.B., Marquering, W., & Zhang, C.Y. (2014). Gender Differences in Optimism and Asset Allocation. Journal of Economic Behavior & Organization, 107, 630-651. https://doi.org/https://doi.org/10.1016/j.jebo.2014.03.007.
• Jin, X. (2019). The Role of Market Expectations in Commodity Price Dynamics: Evidence from Oil Data. Journal of International Money and Finance, 90, 1-18. https://doi.org/10.1016/j.jimonfin.2018.09.002.
• Kaplanski, G., Levy, H., Veld, C., & Veld-Merkoulova, Y. (2015). Do Happy People Make Optimistic Investors? Journal of Financial and Quantitative Analysis, 50(1-2), 145-168. https://doi.org/10.1017/S0022109014000416.
• Katona, G. (1957). Federal Reserve Board Committee Reports on Consumer Expectations and Savings Statistics. The Review of Economics and Statistics, 39(1), 40-45. https://doi.org/10.2307/1926219.
• Kuchler, T., & Zafar, B. (2019). Personal Experiences and Expectations about Aggregate Outcomes. The Journal of Finance, 74(5), 2491-2542. https://doi.org/10.1111/jofi.12819.
• Lamla, M.J., & Lein, S.M. (2014). The Role of Media for Consumers' Inflation Expectation Formation. Journal of Economic Behavior and Organization, 106, 62-77. https://doi.org/10.1016/j.jebo.2014.05.004.
• Le Van, C., Navrouzoglou, P., & Vailakis, Y. (2019). On Endogenous Formation of Price Expectations. Games and Economic Behavior, 115, 436-458. https://doi.org/10.1016/j.geb.2019.03.004.
• Łyziak, T. (2016). Financial Crisis, Low Inflation Environment and Short-Term Inflation Expectations in Poland. Bank i Kredyt, 4, 285-300.
• Manski, C.F. (1990). The Use of Intentions Data to Predict Behavior: A Best-Case Analysis. Journal of the American Statistical Association, 85(412), 934-940. https://doi.org/10.2307/2289590.
• Marcato, G., & Nanda, A. (2016). Information Content and Forecasting Ability of Sentiment Indicators: Case of Real Estate Market. Journal of Real Estate Research, 38(2), 165-203.^ Stanley, T. (2000). An Empirical Critique of the Lucas Critique. The Journal of Socio-Economics, 29, 91-107. https://doi.org/10.1016/S1053-5357(00)00055-X.
• Stanisławska, E. (2018). Czy pytając konsumentów o wartość przewidywanej inflacji, można uzyskać wiarygodne i użyteczne informacje. Bank i Kredyt, 5, 515-556.
• Tobin, J. (1959). On the Predictive Value of Consumer Intentions and Attitudes. The Review of Economics and Statistics, 41(1), 1-11. https://doi.org/10.2307/1925452.
• Walerysiak, G. (2015). Analiza głównych cech oczekiwań inflacyjnych konsumentów indywidualnych w Polsce w latach 2004-2014. Zarządzanie i Finanse, 2015, 13 (4), 301-315.

Identyfikatory

DOI

10.14659/WOREJ.2019.110.02