The Unassuming Economist

On the US:

• Why America Needs More Social Housing – American Prospect
• Housing: A shortage of cities – City Observatory
• Is Housing a Good Investment? Where You Stand Depends on Where You Sit – Federal Reserve Bank of New York
• Home Remodeling Expected to Remain Strong and Steady into 2019 – Harvard Joint Center for Housing Studies

On other countries:

• [Canada] Not In My Neighbor’s Back Yard: External Effects of Density – University of British Columbia
• [Canada] The Propagation of Regional Shocks in Housing Markets: Evidence from Oil Price Shocks in Canada – Centre for Economic Policy Research
• [China] Effect of land prices on the spatial differentiation of housing prices: Evidence from cross-county analyses in China – Journal of Geographical Sciences
• [Korea] Housing Dynamics in Korea – OECD
• [United Arab Emirates] Abu Dhabi’s housing market cools down – Financial Times
• [United Kingdom] Building more homes requires more than planning tweaks – Financial Times
• [United Kingdom] London house prices mark first annual drop since 2009 – Financial Times

Photo by Aliis Sinisalu

From a new IMF Working Paper by Richard Koss and Xinrui Shi:

“The sharp rise of house prices in China’s Tier-1 cities has fostered a great deal of commentary about the possibility of bubbles forming there. However, China’s unique housing market characteristics make it difficult to assess the macroeconomic severity of bursting bubbles, even if they exist. These include the setting of land supply and prices by the government, among many others. The presence of overbuilt “ghost cities” greatly complicates the ability of traditional macroeconomic policies to address these concerns. This paper looks at proposals to shore up the mortgage underwriting and legal infrastructure to help China withstand the impact of falling prices, should this occur.”

On cross-country:

• For Home Prices in London, Check the Tokyo Listings – IMF
• Global Investors, House Price Dispersion, and Synchronicity – IMF
• Housing as a Financial Asset – IMF
• The Global Housing Crisis – The Atlantic
• Global Residential Cities Index – Q4 2017 – Knight Frank

On the US:

• Housing Recoveries without Homeowners: A Global Perspective – Federal Reserve Bank of St. Louis
• The Housing Supply Puzzle: Part 1, Divergent Markets – Federal Reserve Bank of St. Louis
• The Housing Supply Puzzle: Part 2, Rental Demand – Federal Reserve Bank of St. Louis
• The Unfulfilled Promise of the Fair Housing Act – The New Yorker
• The Fair Housing Act at 50: Not Sufficiently Powerful to Reverse Residential Racial Segregation – Social Education
• The Fair Housing Act at 50 – Harvard Joint Center for Housing Studies
• VIDEO: Housing Segregation In Everything – NPR
• American Houses Keep Getting Bigger — And so Does American Debt – Mises Institute
• What is holding back housing? – Business Economics
• What Would it Take for Housing Subsidies to Overcome Affordability Barriers to Inclusion in All Neighborhoods? – Harvard Joint Center for Housing Studies
• How Will the New Tax Law Affect Homeowners in High Tax States? It Depends – Federal Reserve Bank of New York
• Have Incomes Kept Up with Rising Rents? – Harvard Joint Center for Housing Studies
• A change to California’s housing supply law could spur a big expansion in home building – Los Angeles Times
• A Small Fix for the Housing Crunch Is in Your Backyard – Bloomberg

Photo by Aliis Sinisalu

From IMF’s Global Financial Stability Report – April 2018:

“Housing is an important asset class for households and investors. In a typical economy, housing wealth, on average, accounts for roughly one-half of total national wealth and can fluctuate considerably over time (Piketty 2014). Real estate investors often borrow to purchase housing assets, making mortgage payments and receiving rental income and potential capital gains. Publicly traded real estate investment trusts have become available in many countries, allowing investors to invest indirectly in the real estate market. In addition, institutional investors have been increasing their direct exposure to residential real estate in recent years (see Figure 3.3 in the main text).

Investing in housing assets can yield considerable returns in the long term, but is subject to significant variation over time. In many advanced economies, the average annual real return on housing assets between 1950 and 2015 lies between 5 percent and 8 percent,comparable in magnitude to that of equity investment but with a lower standard deviation (Jordà and others 2017). In the shorter term, however, the expected returns on housing assets can vary significantly over time and are affected by the risk appetite of financial market investors as well as other behavioral factors (for example, Cheng, Raina, and Xiong 2014; Brunnermeier and Julliard 2008).”

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From IMF’s Global Financial Stability Report – April 2018:

“House price dispersion can be used as a proxy for demand from high-net-worth foreign investors with a preference for luxury housing. Using granular data from the US housing market, this box finds that house price dispersion in the United States has increased sharply over recent decades, and it increases when house prices in alternative investment destinations outside the United States rise. Both findings point to global investors contributing to house price synchronicity across cities and countries.”

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