Title: Speculative bubbles in regional housing markets
Authors: Andre Anundsen - Norges Bank (Norway) [presenting]
Bjoernar Kivedal - Oestfold University College (Norway)
Abstract: Quarterly data for the 182 metropolitan statistical areas in the US for the period 1985q1-2015q4 are used in order to test for rational bubbles in local housing markets. Applying tests for explosive roots in price-to-income ratios, we find evidence suggesting that 81 percent of the areas experienced a bubble in the period between 2000 and 2015. Conditional on bubble-detection, we date - stamp the start and end of bubbles across metro areas. We find that and both the dating and the duration of the bubble differ substantially. We also calculate a measure of the amplitude of the bubble. We find that areas with more restrictions on land supply were more prone to stronger bubble dynamics. We also find that population size, house price level and subprime lending affected the duration of the bubble.