The Recovery of the US Housing Market After the Financial Crisis of the Great Recession by Professor Eric Smith

Join us for this weeks Macroeconomics Research Seminar, Autumn Term 2021.

Professor Eric Smith, from the department of Economics, will present their research on The Recovery of the US Housing Market After the Financial Crisis of the Great Recession

Abstract

This paper documents trading patterns in the U.S. housing market between the Great Recession in 2007 and the onset of the Covid-19 pandemic in 2020. A number of familiar observations concerning the volatility, co-movement and persistence of prices, sales, listings, inventories and time to sale emerge from the data. More novel observations conditioned on duration also emerge. A striking pattern exists in both the bi-weekly hazard of accepting an offer from a buyer and the hedonic prices conditional on time to sale. The hazard is constant across durations during the initial phase of the downturn but changes dramatically and differentially once the recovery occurs. The shortest duration hazard recovers faster and more decidedly than the longer duration hazards. Therefore, once the recovery takes hold, the hazard function exhibits substantial duration dependence. Likewise, hedonic prices conditional on the time on market at the time of sale fall until 2012 but then recover displaying pattern by duration similar to the hazards. The shortest duration prices recover faster and out of sync with the other prices. The paper then demonstrates that a stock-flow matching model provides a plausible framework for generating this dynamic behaviour observed in the housing market.   

This seminar will be held on campus in the Economics Common Room at 1pm on Tuesday 16th November, but will also be available on Zoom. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.