Download or read book Housing Risk and Return written by Karl E. Case and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the risk-return relationship in determination of housing asset pricing. In so doing, the paper evaluates behavioral hypotheses advanced by Case and Shiller (1988, 2002, 2009) in studies of boom and post-boom housing markets. The paper specifies and tests a housing asset pricing model (H-CAPM), whereby expected returns of metropolitan-specific housing markets are equated to the market return, as represented by aggregate US house price time-series. We augment the model by examining the impact of additional risk factors including aggregate stock market returns, idiosyncratic risk, momentum, and Metropolitan Statistical Area (MSA) size effects. Further, we test the robustness of H-CAPM results to inclusion of controls for socioeconomic variables commonly represented in the house price literature, including changes in employment, affordability, and foreclosure incidence. Consistent with the traditional CAPM, we find a sizable and statistically significant influence of the market factor on MSA house price returns. Moreover we show thatmarket betas have varied substantially over time. Also, we find the basic housing CAPM results are robust to the inclusion of other explanatory variables, including standard measures of risk and other housing market fundamentals. Additional tests of the validity of the model using the Fama-MacBeth framework offer further strong support of a positive risk and return relationship in housing. Our findings are supportive of the application of a housing investment risk-return framework in explanation of variation in metro-area cross-section and time-series US house price returns. Further, results strongly corroborate Case-Shiller behavioral research indicating the importance of speculative forces in the determination of U.S. housing returns.
Download or read book Risk and Return in the Single Family Housing Market written by Theodore M. Crone and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The tradeoff between risk and return in equity markets is well established. This paper examines the existence of the same tradeoff in the single-family housing market. For home buyers, who constitute about two-thirds of U.S. households, the choice about how much housing and which house to buy is a joint consumption/investment decision. Does this consumption/investment link negate the risk/return tradeoff within the single-family housing market? Theory suggests the link still holds. This paper supplies empirical evidence insupport of that theoretical result. The views expressed here are solely those of the author and do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or of the Federal Reserve System.
Download or read book Risk and Return in the Single family Housing Market written by Theodore M. Crone and published by . This book was released on 1996 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Risk and Return within the Single Family Housing Market written by Theodore M. Crone and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The trade-off between risk and return in equity markets is well established. This paper examines the existence of the same trade-off in the single-family housing market. That market is dominated by homeowners, who constitute about two-thirds of U.S. households. For them the choice about how much housing and what house to buy is a joint consumption/investment decision. Furthermore, owner-occupied housing is by nature a lumpy investment whose risk cannot be completely diversified. Does this consumption/investment link negate the risk/return trade-off within the single-family housing market? Theory suggests the link still holds. This paper supplies empirical evidence in support of that theoretical result.
Download or read book Essays on Local Housing Risk and Return written by Guoliang Feng and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Buy Rehab Rent Refinance Repeat written by David Greene and published by Biggerpockets Publishing, LLC. This book was released on 2019-05-16 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt: Invest in real estate and never run out of money--using the hottest strategy in the real estate world!
Download or read book Risk and Return Within the Single family Housing Market written by Theodore M. Crone and published by . This book was released on 1998 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the existence of the same trade-off in the single-family housing market. That market is dominated by homeowners, who constitute about two-thirds of U.S. households. For them the choice about how much housing and what house to buy is a joint consumption/investment decision. Furthermore, owner-occupied housing is by nature a lumpy investment whose risk cannot be completely diversified. Does this consumption/investment link negate the risk/return trade-off within the single-family housing market? Theory suggests the link still holds. This paper supplies empirical evidence in support of that theoretical result. support of that theoretical result.
Download or read book Risk and Return in the U S Housing Market written by Susanne E. Cannon and published by . This book was released on 2011 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper carries out an asset-pricing analysis of the U.S. metropolitan housing market. We use zip code level housing data to study the cross-sectional role of volatility, price level, stock market risk and idiosyncratic volatility in explaining housing returns. While the related literature tends to focus on the dynamic role of volatility and housing returns within submarkets over time, our risk-return analysis is cross-sectional and covers the national U.S. metropolitan housing market. The study provides a number of important findings on the asset-pricing features of the U.S. housing market. Specifically, we find i) a positive relation between housing returns and volatility with returns rising by 2.48% annually for a 10% rise in volatility, ii) a positive but diminishing price effect on returns, iii) that stock market risk is priced directionally in the housing market and iv) idiosyncratic volatility is priced in housing returns. Our results on the return-volatility-price relation are robust to i) MSA (metropolitan statistical area) clustering effects and ii) differences in socioeconomic characteristics among submarkets related to income, employment rate, managerial employment, owner occupied housing, gross rent and population density.
Download or read book Investment in Housing in the United States written by Krister Andersson and published by International Monetary Fund. This book was released on 1990-10-01 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is well known that the preferential tax treatment of housing induces an inefficient allocation of saving and investment. This paper analyzes, in a portfolio framework, how eliminating the deductibility of mortgage interest payments for federal income tax purposes might affect investment in housing. Expected rate of return and risk is estimated for three assets, bonds, housing, and stocks. The possibility that assets are imperfect substitutes is explicitly recognized in one section of the paper. The model suggests that the share of housing is likely to decrease by 4 to 9 percentage points if mortgage interest payments are not deductible. This may call for careful phasing of the change in policy.
Download or read book Strong Towns written by Charles L. Marohn, Jr. and published by John Wiley & Sons. This book was released on 2019-10-01 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt: A new way forward for sustainable quality of life in cities of all sizes Strong Towns: A Bottom-Up Revolution to Build American Prosperity is a book of forward-thinking ideas that breaks with modern wisdom to present a new vision of urban development in the United States. Presenting the foundational ideas of the Strong Towns movement he co-founded, Charles Marohn explains why cities of all sizes continue to struggle to meet their basic needs, and reveals the new paradigm that can solve this longstanding problem. Inside, you’ll learn why inducing growth and development has been the conventional response to urban financial struggles—and why it just doesn’t work. New development and high-risk investing don’t generate enough wealth to support itself, and cities continue to struggle. Read this book to find out how cities large and small can focus on bottom-up investments to minimize risk and maximize their ability to strengthen the community financially and improve citizens’ quality of life. Develop in-depth knowledge of the underlying logic behind the “traditional” search for never-ending urban growth Learn practical solutions for ameliorating financial struggles through low-risk investment and a grassroots focus Gain insights and tools that can stop the vicious cycle of budget shortfalls and unexpected downturns Become a part of the Strong Towns revolution by shifting the focus away from top-down growth toward rebuilding American prosperity Strong Towns acknowledges that there is a problem with the American approach to growth and shows community leaders a new way forward. The Strong Towns response is a revolution in how we assemble the places we live.
Download or read book The Risk Return Relationship in Housing Markets written by Lu Han and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Standard risk-return tradeoff theory cannot explain why housing return varies with risk positively in some markets but negatively in some other markets. This paper addresses this issue by incorporating two unique features of housing into a standard consumption-based asset pricing model: (1) intertemporal hedging incentives and (2) a kinked housing supply function. The model nests two competing effects of price risk on housing return: a financial risk effect associated with owning risky housing asset, and a consumption insurance effect associated with using the current house to hedge against future housing cost risk. The empirical findings confirm several equilibrium predictions implied by the model. In particular, the variation in housing risk-return relationship across markets is driven by both local households' hedging incentives and housing supply constraints.
Download or read book Residential Housing as an Investment written by Leo Theodore Sprecher and published by . This book was released on 1976 with total page 380 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Housing as a Measure for Long Run Risk in Asset Pricing written by Jose L. Fillat and published by . This book was released on 2015 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: I evaluate the effects of long-run consumption growth risk and housing consumption risk on asset prices. Current asset values are affected by the risk-return tradeoff in the long-run. Housing plays an important role in the economy. As an asset, it is particularly sensitive to long-run risk-return trade off; as a consumption component, it accounts for one fifth of the total expenditures in non durable goods and services. The investment horizon for housing is usually distant in the future. Investors fear shocks that can affect the value of their house for a long period of time. Such shocks affect substantially the services obtained from the house and its price as an asset as well. I use a non-separable utility function with non-housing consumption and consumption of housing services, which generates an intertemporal composition risk, besides the traditional consumption growth risk. The composition risk has effects for the valuation of cash flow growth fluctuations far into the future due to the persistence of consumption growth. I provide a closed form solution for the valuation function despite the non-separability. This allows me to quantify the price of risk in the long-run with inputs from vector autoregressions. I evaluate the different exposure to long-run risk of a cross section of portfolios of securities, and characterize the price of risk for different investment horizons. The model also explains the spread of the returns to different portfolios sorted in book to market and housing returns, at different investment horizons.
Download or read book Findings from a Cross Sectional Housing Risk Factor Model written by Eli Beracha and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Housing data from the last 25 years show that returns to residential real estate in the U.S. can be volatile and vary significantly among locations. The variations in returns are driven by economically as well as geographically and psychologically motivated factors, but so far, no asset pricing model that adequately explains systematic risks in cross-sectional housing returns is widely accepted. This paper proposes an asset pricing model for housing returns that includes a market-wide return factor, an economically motivated factor derived from income growth, a geographically based factor derived from land supply elasticity and a momentum factor, which is psychological in nature. The model explains well the systematic risks in housing returns and is robust to different portfolio segmentations. Moreover, the model illustrates that local risk factors indirectly capture the risk previously attributed to market-wide price changes. While housing is not actively traded when compared to other financial assets, understanding the risk-factors that explain housing return in cross-section provides important insight for real estate investors, builders, real estate future traders, homeowners, banks and other mortgage lenders.
Download or read book Expected Inflation Risk and the Return on Owner occupied Housing written by Kurt D. Winkelmann and published by . This book was released on 1987 with total page 376 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Housing Bubble written by Kieran Trass and published by Penguin UK. This book was released on 2009-08-03 with total page 170 pages. Available in PDF, EPUB and Kindle. Book excerpt: After a long-running property market boom, all indications are that New Zealand is facing at least half a decade of slow or declining values. This trend is mirrored in most countries across the globe. Kieran Trass, real estate investor, advisor and commentator, reassures us that yes, we can still make money at all stages of the property cycle - slump, recovery and boom. The key is having the right knowledge and information. The Housing Bubble addresses all your real-estate questions, including:'How will we know when the slump is coming to an end?''When is it a good time to buy?' and'When will we see market recovery?
Download or read book The Risk Fall and Return of the Public Option in Housing Finance written by Adam J. Levitin and published by . This book was released on 2012 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt:
