The Unassuming Economist

On cross-country:

• How consumer behaviour sways the housing market- and the economy – ING

On the US:

• What’s Up With Construction Costs? – BuildZoom
• The Goldilocks problem of housing supply: Too little, too much, or just right? – Brookings
• Gentrification and Fair Housing: Does Gentrification Further Integration? – Furman Center for Real Estate and Urban Policy
• Where Have All The Renters Gone? – Harvard Joint Center for Housing Studies
• Risky Home Loans Are Making a Comeback. Are They Right for You? – New York Times
• California Needs a Housing Revolution – Bloomberg
• Here’s Housing’s Real Threat to the Economy – Bloomberg

On other countries:

• [Australia] Sydney’s house prices face a falling tide – Financial Times
• [Botswana] The housing market’s potential to boost Botswana’s economic growth – Bank of Botswana
• [Mexico] Mexico’s housing market is strengthening – Global Property Guide
• [Netherlands] Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles – VoxEU
• [Singapore] Can Singapore’s social housing keep up with changing times? – BBC

Photo by Aliis Sinisalu

The IMF’s latest report on Cambodia says:

“Real-estate sector risks. Capital continues to flow into the construction sector driven by regional investors and strong demand for residential and retail space. Significant data gaps, including on property prices, complicate the assessment of risks. There is anecdotal evidence that growing oversupply is dampening prices of high-end apartments, while, given the segmented nature of the market, property prices for retail and residential properties remain robust. As a result, affordability of residential housing is being eroded. Credit growth to the real estate sector, a key transmission channel linking credit and economic growth, has averaged around 35 percent since 2016, driven by few banks. Further heightening risks, real-estate developers are reportedly offering mortgages with looser lending conditions, an activity that remains unmonitored and unregulated.”

The IMF’s latest report on Kosovo says:

“With strong growth in property lending (beyond mortgages, this includes commercial and residential construction loans, consumer credit used for housing finance, suppliers’ credit) amid signs of a supply overhang in the capital, the authorities should closely monitor the market and develop a housing price index or create a centralized registry of property valuations to convey the price signal of the property market.”

On cross-country:

• Global House Price Index-Q3 2018 – Knight Frank
• Border Effects in House Prices – Real Estate Economics

On the US:

• Special Issue: The Appropriate Role of Government in U.S. Mortgage Markets – Federal Reserve Bank of New York
• Shiller Hystericizes The US Housing Market – EconoSpeak
• Minneapolis 2040: The most wonderful plan of the year – Brookings Institute
• Minneapolis, Tackling Housing Crisis and Inequity, Votes to End Single-Family Zoning – New York Times
• Income Inequality, Mortgage Debt and House Prices – London School of Economics
• More Than a Third of American Households Were Cost-Burdened Last Year – Harvard Joint Center for Housing Studies
• Risk is building in the housing market – American Enterprise Institute
• Connecting the dots on home builder performance – American Enterprise Institute
• Homelessness Rises More Quickly Where Rent Exceeds a Third of Income – Zillow
• Progressive Minneapolis Just Passed One of the Most Deregulatory Housing Reforms in the Country – Reason
• Housing Sentiment Up Slightly on Reported Household Income Gains – Fannie Mae

On other countries:

• [Australia] The potential of new technologies to disrupt housing policy – AHURI
• [China] House prices and marriage entry in China – Regional Science and Urban Economics
• [Thailand] Thailand’s house prices rising strongly again – Global Property Guide
• [United Kingdom] Property prices where you live compared to where you work – Financial Times 

Photo by Aliis Sinisalu

From Bob Shiller on the US housing market:

On the current housing boom:

“(…) this is the United States’ third biggest housing boom in the modern era. (…) All we do know is that prices have been roaring higher at a speed rarely seen in American history.”

On possible explanations:

Low interest rates: “There is some apparent merit to this view, since these three biggest nationwide housing booms all included very low interest rates. But the market reaction to interest rates is hardly immediate or predictable. The housing market does not react as directly as you might expect to interest rate movements. Over the nearly seven years of the current boom, from February 2012 to the present, all major domestic interest rates have increased, not decreased. So, while interest rates have been low, they have moved the wrong way, yet the boom has continued.”

Economic growth: “Another explanation is simple economic growth. But, as a matter of history, prices of existing homes—as opposed to the supply of newly built homes— have generally not responded to economic growth. There was only a 20% increase in real prices of existing homes in the 50 years from 1950 to 2000 despite a sixfold increase in real GDP.”

Return to normal: “The simplest narrative being given for the current boom is just that the 2008-2009 financial crisis and the so-called Great Recession are over and home prices are returning to normal. But that explanation does not cut it either. In September they were 11% higher than at the 2006 peak in nominal terms, and almost as high in real terms. This is not a return to normal, but a market that appears to be rising to a record.”

President Trump: “It is difficult to assess the contribution of President Trump to the current boom. (…) The Trump administration’s attitude toward housing is less clear. President Trump’s slogan “Make America Great Again” has overtones of the “American dream.” But provisions of his Tax Reform and Jobs Act of 2017 were unfriendly to homeowners.”