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Journal Article
The boom and bust of U.S. housing prices from various geographic perspectives
This paper summarizes changes in housing prices during the recent U.S. boom and bust from various geographic perspectives. Nationally, the Standard & Poor?s/Case-Shiller house price index more than doubled in nominal terms during the boom and has fallen by roughly a third subsequently. During the boom, housing prices tended to rise much faster in metropolitan areas in the East and West Coast regions than in the country?s interior. After adjusting for inflation, 7 of 19 metropolitan areas have experienced real declines in housing prices from the start of the boom to the present. Although ...
Working Paper
Supply constraints and housing market dynamics
Although the volatility of house prices is often ascribed to demand-side factors, constraints on housing supply have important and little-studied implications for housing dynamics. I illustrate the strong relationship in city-level data between the volatility of house prices and the regulation of new housing supply. I then employ a dynamic structural model of housing investment to estimate the effect of supply constraints on both the level of new construction and the responsiveness of investment to house prices. I find that supply constraints increase volatility through two channels: First, ...