The Unassuming Economist

From a new paper by Heidi Artigue, Jeffrey Brinkman, and Svyatoslav Karnasevych:

“As house prices continue to rise in large, supply-constrained cities, what are the implications for other places that have room to grow? Recent literature suggests that amenities that improve quality of life are becoming increasingly important in location decisions. In this paper, we explore how location amenities have differentially driven population and price dynamics in small towns versus big cities, with a focus on the role of housing supply. We provide theory and evidence that demand for high-amenity locations has increased in recent decades. High-amenity counties in large metropolitan areas have experienced relatively higher price increases, while high-amenity counties in small metros and rural areas have absorbed increased demand through population growth. This divergence in population dynamics between big cities and small towns was driven by domestic migration, with high-amenity small towns and rural areas experiencing significant domestic in-migration.”

From Real Estate Finance and Economics Network:

“A conference was organized by the Alter Property Data Network on November 21^st, 2022, hosted by ReFinE/Institut Louis Bachelier. This network gathers economists, data scientists and practitioners from all over the world (from the IMF, World Bank, OECD, European Commission, BIS, central banks, universities…) who share information, data, programs and papers on alternative techniques (web-scraping, mobile data, satellite data, machine learning, text mining…) related to housing and construction in general.

(…)

The theme of this conference was:  To what extent do alternative techniques (web-scraping, satellite data…) help to better understand what happened during the Covid crisis in housing and construction?

After a transversal introductory statement by Yunhui Zhao (IMF), this conference gave insights mainly from two different perspectives, first showing how alternative tools such as web-scraping or satellite data can give additional information on real estate during the Covid-19 and showing the latest developments on methodological tools on housing and construction.

The first part included:

• An OECD paper showing evolutions in housing demand during the pandemics: Rudiger Ahrend, Manuel Bétin, Maria Paula Caldas, Boris Cournède, Marcos Diaz Ramirez, Pierre-Alain Pionnier, Daniel Sanchez-Serra, Paolo Veneri and Volker Ziemann (OECD): Changes in the geography housing demand after the onset of COVID-19: First result for large cities in 13 OECD countries, https://www.oecd-ilibrary.org/economics/changes-in-the-geography-housing-demand-after-the-onset-of-covid-19-first-results-from-large-metropolitan-areas-in-13-oecd-countries_9a99131f-en  
• A Banca d’Italia paper analyzing the evolution of housing preferences in the case of Italy:  Elisa Guglielminetti & Michele Loberto & Giordano Zevi & Roberta Zizza (Banca d’Italia): Living on my own: the impact of the Covid-19 pandemic on housing preferences; https://www.bancaditalia.it/pubblicazioni/qef/2021-0627/QEF_627_21.pdf  
• An article that complements the official statistics on the evolution of the housing market in the UK: Jean-Charles Bricongne (Banque de France), jointly with Baptiste Meunier and Sylvain Pouget: Web-scraping housing prices in real-time: the Covid-19 crisis in the UK (https://www.banque-france.fr/sites/default/files/medias/documents/wp827.pdf )

The second part on methodological tools included the following presentations:

• Alexandre Banquet (OECD): presentation of advances in satellite data for the monitoring of built areas: Dynamic World and new version of GHSL
• Nina Biljanovska (IMF), Chenxu Fu (IMF) & Deniz Igan (BIS), Housing Affordability: A New Panel Dataset
• Emmanuel Flachaire, Gilles Hacheme, Sullivan Hué and Sébastien Laurent (AMSE): GAM(L)A: An econometric models for interpretable Machine Learning, used to forecast housing prices in Boston (USA); https://slaurent.pagesperso-orange.fr/pdf/GAMA.pdf  
• Pierre-Alain Pionnier (OECD), jointly with Johannes Schuffels: Estimating regional house price levels; Methodology and results of a pilot project with Spain, https://www.oecd-ilibrary.org/fr/economics/estimating-regional-house-price-levels_b9fec1b2-en  “.

From the IMF’s latest report on Cambodia:

“There are signs that the domestic real estate market (both high-end residential and commercial) is experiencing a downturn. Yields indicate a growing surplus of commercial and high-end residential space. Rental prices for commercial developments, as well as purchase prices for high-end residential properties, appear to be falling after more than a decade of sustained growth. The sector is important in terms of both GDP share and exposure of the rest of the economy.”

From the IMF’s latest report on the Philippines:

On cross-country:

• Housing Market Stability and Affordability in Asia-Pacific – IMF 
• Global house price fall underway won’t do much for affordability, say analysts – Reuters
• European house prices may be on the verge of falling, risk watchdog says – Reuters
• Cuatro acciones para reducir el déficit de vivienda mediante activos públicos – Inter-American Development Bank

On the US—housing forecasts for 2023

• 2023 Housing Forecasts – Calculated Risk
• Is The Housing Market Slowing Down: Redfin 2023 Predictions – Forbes
• What Does 2023 Hold for the Housing Market and Property Industry? – CoreLogic
• The Housing Market Will ‘Rebalance’ in 2023, Experts Predict. What That Means for You – Next Advisor  

On the US—developments on house prices, rent, permits and mortgage:    

• The Rent Control Bandwagon Rolls On – Cato
• Waiting for Home Prices to Drop? Bad Strategy. House prices may be declining in San Jose and Austin, but buyers looking in other markets won’t see much of a discount. – Bloomberg
• Housing Inflation Is Still Hot, But Mortgage Rates Could Ease Further – Barron’s
• Current State of the Housing Market; Overview for mid-December. A Sharp Decline in Sales, House Prices and Rents Falling – Calculated Risk

On the US—other developments:    

• The American Dream Needs an Extensive Renovation. To address a worsening housing crisis, stop limiting supply and subsidizing the wrong kind of demand. – Bloomberg
• How Did the Housing Market Get So Unaffordable for So Many? Recent volatility in home prices and rents has been a long time coming. Fixing it will require abandoning outdated policy frameworks. – Wall Street Journal 
• The Federal Reserve Is Deflating Financial Bubbles, Without a Crash. Cryptocurrencies, house prices and tech stocks are coming down. Financial strains so far seem contained, observers say – Bloomberg
• Mortgage Equity Withdrawal Still Solid in Q3. Homeowners now relying on Home Equity lines to extract equity – Calculated Risk
• Why the Dream of Turning Empty Offices Into Housing Is a Bust. Downtowns could use it, but that’s not enough. – Slate
• 2nd Look at Local Housing Markets in November. Another step down in sales in November – Calculated Risk
• Housing, Inflation and Why the Fed Should Consider a Pause – Calculated Risk
• Applications to Buy US Homes Rise as Mortgage Rates Hold Steady – Bloomberg
• Readout of White House Meeting with State Legislative Leaders on Housing Affordability – White House
• The Internet Made The Housing Market Less Rational – Real Estate Decoded  

On China:

• How China’s Property Developers Got Into Such a Mess – Washington Post

On other countries:  

• [France] Housing crisis prompts French students to escape to the country – The Guardian
• [Ireland] Increasing future housing supply: What are the implications for the Irish economy? – ESRI
• [Israel] Israeli lawmaker tables bill to limit banks raising mortgage rates – Reuters
• [Netherlands] Netherlands to Cap Rents of Thousands of Homes at $1,172. Over 300,000 homes will have their rent reduced by around €190. Landlords who charge too high rents will soon risk fines – Bloomberg
• [New Zealand] New Zealand house prices to bust then boom – Macro Business
• [New Zealand] New Zealand house prices fall as interest rates bite -REINZ – Reuters
• [Sweden] Sweden’s Free-Falling Property Market Triggers Worst Economic Slump in EU. Home values in Sweden are now down 15% from their peak. Commercial real estate has been identified as the main risk – Bloomberg
• [Sweden] Swedish Households Turn Gloomier on Outlook for Home Prices. Almost six in ten see more housing weakness in SEB survey. Most local forecasters expect 20% price slide from peak level – Bloomberg
• [United Kingdom] UK Home Asking Prices Are Falling at Sharpest Pace in Four Years. Buyers wait to see whether next year will bring more stability. Rightmove forecasts a 2% fall in asking prices over next year – Bloomberg 
• [United Kingdom] The UK Housing Market Is at Risk of a Deep Freeze. A stalemate between sellers and buyers is likely — until and unless desperation sets in. – Bloomberg
• [United Kingdom] London’s house prices fall as all other regions rise. Average cost of UK home £33,000 higher in October than last year – FT