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Housing bubbles and the development of fundamentals

Farestveit, Robert Eric LU (2011) NEKM01 20111
Department of Economics
Abstract
The issue of a housing bubble has been abundantly debated in Sweden. In this thesis, we investigate whether the current state of the Swedish housing market is comparable to the recent US ‘housing bubble’. Growth rates of house prices can vary greatly between different regions, which shows the need for analysis of house prices on a regional level. Using a panel consisting of 22 Swedish counties and a similar panel of 10 US metropolitan statistical areas, we examine a fundamental house price model of supply and demand to determine whether fundamentals can account for high growth in house prices. Our results suggest that Swedish house prices have outgrown fundamentals to some extent and that the US housing market may have reached equilibrium... (More)
The issue of a housing bubble has been abundantly debated in Sweden. In this thesis, we investigate whether the current state of the Swedish housing market is comparable to the recent US ‘housing bubble’. Growth rates of house prices can vary greatly between different regions, which shows the need for analysis of house prices on a regional level. Using a panel consisting of 22 Swedish counties and a similar panel of 10 US metropolitan statistical areas, we examine a fundamental house price model of supply and demand to determine whether fundamentals can account for high growth in house prices. Our results suggest that Swedish house prices have outgrown fundamentals to some extent and that the US housing market may have reached equilibrium after several years of decline. (Less)
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author
Farestveit, Robert Eric LU
supervisor
organization
alternative title
Evidence from panel-data cointegration analysis of the Swedish and US housing markets
course
NEKM01 20111
year
type
H2 - Master's Degree (Two Years)
subject
keywords
panel data, cointegration, Sweden, USA, Housing bubble
language
English
id
2153732
date added to LUP
2011-09-27 09:15:37
date last changed
2011-09-27 09:15:37
@misc{2153732,
  abstract     = {The issue of a housing bubble has been abundantly debated in Sweden. In this thesis, we investigate whether the current state of the Swedish housing market is comparable to the recent US ‘housing bubble’. Growth rates of house prices can vary greatly between different regions, which shows the need for analysis of house prices on a regional level. Using a panel consisting of 22 Swedish counties and a similar panel of 10 US metropolitan statistical areas, we examine a fundamental house price model of supply and demand to determine whether fundamentals can account for high growth in house prices. Our results suggest that Swedish house prices have outgrown fundamentals to some extent and that the US housing market may have reached equilibrium after several years of decline.},
  author       = {Farestveit, Robert Eric},
  keyword      = {panel data,cointegration,Sweden,USA,Housing bubble},
  language     = {eng},
  note         = {Student Paper},
  title        = {Housing bubbles and the development of fundamentals},
  year         = {2011},
}