The Unassuming Economist

The IMF’s latest report on Estonia says:

“Residential real estate market activity has increased, but prices remain well anchored to income and nominal GDP growth (figures below). The number of transactions in 2017 rose by
8 percent compared to the level in 2016 and the real estate price index increased by 5 percent, driven partly by the growing share of new apartments. Going forward, the number of permit applications suggest construction activity should be sufficient to just maintain the current housing stock.”

 

 

The report also says that: “Housing market trends, both domestic and abroad, are important drivers of banking sector developments in Estonia. While household indebtedness is moderate, banks’ extension of housing loans accelerated in 2017. Higher interest rates following an eventual monetary policy normalization could pose a risk for household finances and potentially affect future financial developments and economic growth. In addition, developments in cross-border banking linkages indicate that potential spillovers from vulnerabilities in Nordic parent banks, notably the Swedish real estate sector, require further safeguards for financial stability, notably in cross-border banking supervision through the Nordic-Baltic cooperation platform.”

On cross-country: 

• The Efficiency of Savings-linked Relationship Lending for Housing Finance – Journal of Housing Economics 
• Do House Prices Sink or Ride the Wave of Immigration? – IZA Institute of Labor Economics 
• Cultural similarities and housing market linkage: evidence from OECD countries – Springer 
• ¿Es Airbnb realmente culpable de la subida de precios en los alquileres? – GQ 
• ¿Cuáles son y en qué países están los barrios más caros de América Latina? – BBC 

On the US:

• Homeownership and Housing Wealth (Presentation, Remarks, Blog ) – Federal Reserve Bank of New York
• The Links Between Affordable Housing and Economic Mobility – Terner Center
• Faced with a housing crisis, California could further restrict supply – Economist 
• Boston Wants People To Build Tiny Houses In Their Yards – Citylab 
• What the Future of Affordable Housing Already Looks Like – Citylab
• Why universities became big-time real estate developers – Slate 
• Rent-Control Initiative Could Obliterate California’s Housing Markets – Reason 
• Rising Home Prices Lead To Worries Of Another Housing Market Bubble – NPR 
• Housing: High Prices, Few New Units – Mises Institute 
• Ben Carson vs. the Fair Housing Act – New York Times 
• Wall Street Is Pouring Money Into House Flipping – Slate
• Why Don’t People Who Can’t Afford Housing Just Move Where It’s Cheaper? – New York Times
• California Today: In San Francisco’s Housing Lottery, It’s the Luck of the Draw – New York Times
• Housing Tax Credit Qualified Action Plans Affect the Location of Affordable Housing – National Low Income Housing Coalition 
• Rising Rates Vs. The Housing Market – NPR 
• The Seattle Area Is Solving One of Housing’s Biggest Challenges – Slate 
• How Will the Gig Economy Shape Mortgage Lending? – Fannie Mae 
• The Impact of the Tax Cuts and Jobs Act on Local Home Values – Federal Reserve Bank of Cleveland
• The American Housing Crisis Might Be Our Next Big Political Issue – Citylab 

On other countries:

• [Australia] Stricter lending restrictions threaten housing markets in Australia – Global Property Guide 
• [Australia] Inquiry into social impact investment for housing and homelessness outcomes – Australian Housing and Urban Research Institute
• [Canada] Through the Roof: The High Cost of Barriers to Building New Housing in Canadian Municipalities – C.D. Howe Institute
• [Canada] The World’s Hottest Luxury-Property Market Is a Sleepy Canadian City – Bloomberg 
• [Chile] Estudio demuestra que más de la mitad de los santiaguinos no puede comprar una vivienda – CNN 
• [China] China’s property market to steadily cool in 2018 – government think tank – Reuters 
• [Hong Kong] Could a Colonial-Era Golf Club Solve Hong Kong’s Housing Woes? – New York Times 
• [India] Housing demand in Indian metros: a hedonic approach – Emerald 
• [Ireland] Cost Rental Housing – A Model for Ireland? – NERI 
• [Spain] Spain is cracking down on Airbnb, just in time for the tourist season – Quartz 
• [United Kingdom] Britain’s housing supply is perking up at last – Economist 
• [United Kingdom] How to make the case for community-led housing on public land – New Economics Foundation

Photo by Aliis Sinisalu

On cross-country:

• Housing and the Business Cycle Revisited – University of Augsburg
• Prime Global Cities Index – Q1 2018 – Knight Frank
• How 3D printing is revolutionizing the housing industry – TechCrunch

On the US:

• Fueling a Frenzy: Private Label Securitization and the Housing Cycle of 2000 to 2010 – NBER
• The Great Housing Reset – Citylab
• Rising incomes, rising rents, and greater homelessness – McKinsey
• This is the Wrong Time to Cut Back on Public Housing – Institute for Policy Studies
• Tax Luxury Housing to Fund Social Housing – Inequality.org
• Black and White Homeownership Rate Gap Has Widened Since 1900 – Zillow
• 50 Years After the Fair Housing Act – Inequality Lingers – Trulia
• Government Remains the Biggest Obstacle to Fair Housing – The American Prospect
• Housing Confidence Hits New All-Time High – Fannie Mae
• Seattle Executives Join Opposition to New Tax to Fund Housing – Bloomberg
• Civil Rights Advocates Sue Ben Carson for Suspending Fair Housing Act Enforcement Rule – Slate
• Why Economists Don’t Like the Mortgage Interest Deduction – Federal Reserve Bank of St. Louis
• With the Foreclosure Crisis Behind Us, Have We Stopped Adding Single-Family Rentals? – Harvard Joint Center for Housing Studies
• How Recent Tax Reform Sounds a Clarion Call for Real Reform of Homeownership Policy – Tax Policy Center

On other countries:

• [Australia] A playful solution to the housing crisis – TED
• [Canada] High House Prices in Urban British Columbia: Foreign Buyer Fact or Fiction? – Kumtuks
• [Canada] Why High House Prices: Vancouver Academics vs Ottawa Economists – Kumtuks
• [Canada] Sam Sullivan blames government policies, not Chinese buyers, for high Vancouver housing prices – Straight
• [Canada] Montreal Is Canada’s Next Hot Housing Market – Bloomberg
• [China] North Korea Border Town Is Now China’s Hottest Property Market – Bloomberg
• [Colombia] Rental Housing in Bogota, Columbia: Challenges and Opportunities for Creating More Multifamily Properties – Cornell Real Estate Review
• [Spain] A Drone’s Eye View of Spain’s Housing Bubble – Citylab

Photo by Aliis Sinisalu

On the US:

• Nine rules for better housing policy – Brookings
• Can more housing supply solve the affordability crisis? Evidence from a neighborhood choice model – Regional Science and Urban Economics
• Land Use Regulations, Migration and Rising House Price Dispersion in the U.S. – University of Southern California
• Priced out of the American dream – Financial Times
• America Can’t Afford Ben Carson’s Housing Cuts – Bloomberg
• Getting it Right: Examining the Local Land Use Entitlement Process in California to Inform Policy and Process – Berkeley: Center for Law, Energy & the Environment
• Learning from Hurricane Sandy? Rising Seas and Housing Values in New York – ECONOFACT

On other countries:

• [Australia] Is Australia’s Housing Boom (Finally) Coming to an End? – Wall Street Journal
• [Canada] Mortgage Growth in Canada Hasn’t Been This Weak Since 2001 – Bloomberg
• [Canada] Canada’s Economy and Household Debt: How Big Is the Problem? – Bank of Canada
• [China] China’s Dandong property prices jump on Korea talks – Financial Times
• [Hong Kong] What Could End Hong Kong’s Property Boom? Here Are Some Triggers – Bloomberg
• [Israel] Housing Market in Israel – IMF
• [New Zealand] Loan-to-Value Ratio Restrictions and House Prices – Reserve Bank of New Zealand
• [New Zealand] Housing Leverage and Consumption Expenditure – Evidence from New Zealand Microdata – Reserve Bank of New Zealand
• [New Zealand] Land Use Regulation, The Redevelopment Premium and House Prices – University of Auckland
• [United Kingdom] Is innovation the answer to the chronic under-supply of housing in the UK? – Cambridge Centre for Housing & Planning Research

Photo by Aliis Sinisalu

From ECONOFACT:

The Issue:

“The chance of large-scale coastal flooding episodes is increasing. In the last few decades, sea levels have been rising steadily at about 3 centimeters per decade and many estimates expect that this rate will accelerate going forward. At the same time, the population living in coastal counties in the United States grew by 40 percent between 1970 and 2010 and is projected to continue rising. Are people considering the increased risk of flooding associated with sea level rise in their housing decisions? Looking at what happened to property values in New York City after Hurricane Sandy gives us a first look at how those on the front lines may be responding.”

The Facts:

• “Past research has found the response of homebuyers towards flooding risks and the threat of other climate-related hazards to be short-lived. While a region’s exposure to hurricanes or flooding does not vary greatly from one year to the next, many studies have found that homebuyers tend to take these risks much more into account immediately following hurricanes and other catastrophic events. However, these effects tend to be short-lived —very often vanishing completely within five years (see here and here). Flood insurance take-up rates, for instance, have tended to spike the year after a flooding event and then gradually decline to the levels that prevailed before the flood. This response happened not only in the flooded zones but – to a lesser extent — also in non-flooded areas in the same television media markets according to one study. While the risk of flooding remains objectively the same, people may be more aware of it following a flood and then tend to forget about it with the passage of time. It is also possible that, as time goes by, new people who have had less direct exposure to the risk move into the area. These facts suggest a gap between objective probabilities of flood risk and households’ perceptions of this risk. In addition to the psychological biases mentioned, coordination problems, misguided policies, and the expectation of financial assistance by the government in case of disaster might contribute to a mismatch between home prices and damage risk.”

• “Hurricane Sandy was a climatic event of unprecedented proportions that impacted the Greater New York region. The storm hit New York on October 29, 2012. At the time, Sandy was the largest Atlantic hurricane on record and the second costliest in U.S. history (behind Hurricane Katrina), with damages amounting to over $19 billion. Hurricane Sandy flooded 17 percent of New York City (or nearly 90,000 buildings).”

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