Market Efficiency, Housing Affordability and the Real Estate “Bubble” - PowerPoint PPT Presentation

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Market Efficiency, Housing Affordability and the Real Estate “Bubble”. Samuel Alfred Leger. Basic Idea. To develop a better understanding of the current real estate and housing markets Develop a new measure of housing affordability. Research Questions. What is driving housing appreciation?

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Market Efficiency, Housing Affordability and the Real Estate “Bubble”

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Market efficiency housing affordability and the real estate bubble

Market Efficiency, Housing Affordability and the Real Estate “Bubble”

Samuel Alfred Leger


Basic idea

Basic Idea

  • To develop a better understanding of the current real estate and housing markets

  • Develop a new measure of housing affordability


Research questions

Research Questions

  • What is driving housing appreciation?

  • Is the real estate market staying efficient?

  • Is there actually a real estate “bubble”?

  • What can recent homebuyers do to stay afloat in an inflated real estate market?


Research

Research

  • Develop a measure of housing market efficiency and use this measure also to consider housing affordability

  • Examine housing market conditions within the Cape Fear region


Information table

Information Table


Research1

Research

  • Examine home prices, interest rates and household income to see how those variables have swayed.

  • Interest rates adjust to record lows

  • Household income and inflation were modest

  • Possible drivers for housing affordability


Research and process

Research and Process

  • Developing a measure of housing affordability and tracking it over a period of time

  • To discover any extremes in the market, either today or in the recent past.


Research and process1

Research and Process

  • Considering median house prices along with the median household income; a ratio of these is developed for North Carolina with regional data

  • reach conclusions about the local market.


Purpose

Purpose

  • Give insight about market conditions, housing affordability and the much discussed real estate “bubble”


Bibliography

Bibliography

  • Anderson, Randy and Youguo Liang., 2001, Mature and Yet Imperfect: Real Estate Capital Market Arbitrage, Journal of real Estate Portfolio Management, 7: 3, pg. 281.

  • Fickes, Mike., 2001, Feasting on Market Inefficiency Worldwide, National Real Estate Investor, 43: 11, pg. 26.

  • Geddes, Ryan., 2004, Housing Bubble Building?, Business Journal, 19: 49, pg. 1.

  • Guran, Lleana., 2000, Housing Opportunity Index, Housing Economics, 48: 6, pg. 3.

  • Liang, Youguo and Richard A. McLemore., 2004, Housing Appreciation- The Three Fundamental Drivers, Real Estate Finance, 21: 1, pg. 3.

  • Rex, Tom R., 2000, Housing Affordability Worsens For Low-Income Households, Arizona Business, 47:11, pg. 5.

  • Rex, Tom R., 2001, Housing Appreciation Varies Widely Across Nation, Arizona Business, 48: 3, pg. 1.

  • Wang, Peijie., 2000, Market Efficiency and Rationality in Property Investment, Journal of Real Estate Finance and Economics, 21: 2, pg 185.

  • Zietz, Emily N., 2003, Multifamily Housing: A review of Theory and Evidence, The Journal of Real Estate Research, 25: 2, pg 185.


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