House price risk and the hedging benefits of home ownership

Dröes, Martijn I.; Hassink, Wolter

doi:10.1016/j.jhe.2013.03.002

Cited by 16 publications

(8 citation statements)

References 18 publications

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“…They conclude “atypical properties’ prices are more volatile than those of standard properties” (p. 272). Using repeat sales house price indices for homes sold in the Netherlands over the 1995–2008 period, Dröes and Hassink () demonstrate that market‐level house price indices significantly under estimate the house price risk associated with individual homes. They separate total risk into market risk and idiosyncratic risk and measure idiosyncratic risk as the difference between the actual annualized capital appreciation that occurred for properties that sold twice and the appreciation expected using a repeat sales house price index.…”

Section: Introductionmentioning

confidence: 99%

Idiosyncratic Risk of House Prices: Evidence from 26 Million Home Sales

Peng

Thibodeau

2016

Real Estate Economics

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This paper uses about 26 million home sales to measure house price idiosyncratic risk for 7,580 U.S. zip codes during three periods: (1) when the U.S. housing market was stable (1996–2000), (2) booming (2001–2007) and (3) busting (2007–2012), and investigates the determinants of house price risk. We find very strong relationships between risk and some basic housing market characteristics. There is a U‐shaped relationship between risk and zip‐code level median household income; risk is higher in zip codes with more appreciation volatility; and risk is not compensated with higher appreciation.

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Section: Introductionmentioning

confidence: 99%

Idiosyncratic Risk of House Prices: Evidence from 26 Million Home Sales

Peng

Thibodeau

2016

Real Estate Economics

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“…This in turn affects the population's health and well-being through reduced mental health and other health outcomes (Mason et al 2013;Rohrs and Stadelmann 2012;Pollack et al 2010;Hirayama 2010;Flippen 2001;Nettleton and Burrows 1998;Goodman and Nichols 1997). This later reduces their mobility, flexibility, and future job options and ultimately increases instability in their lives (Tumen and Zeydanli 2014;Droes and Hassink 2013).…”

Section: Theoretical Perspectivesmentioning

confidence: 99%

“…Social factors having an influence include mortgage systems, differences in household formation, educational attainment, generational transmissions and race (Halket and Vasudev 2014;Mulder and Smits 2013;Fisher and Gervais 2011;Gyourko et al 1999;Chua and Miller 2009). Economic factors of effect include earning risk; unemployment risk and income uncertainty; female participation in the labour force; income, wealth, credit constraints, and prices of homes; income of immigrants and transaction costs and price risks (Halket and Vasudev 2014;Droes and Hassink 2013;Fisher and Gervais 2011;Gathergood 2011;Flippen 2001;Chua and Miller 2009;Harris 1986).…”

Section: Hypothesesmentioning

confidence: 99%

Retiree home ownership in Saudi Arabia: the role of geographic, demographic, social and economic variables

Al-Khraif¹,

Al-Mutairi²,

Alradihan³

et al. 2018

J Pop Research

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Home ownership has implications for a family's empowerment and quality of life, especially post-retirement. Economic conditions, the cost of living, and child-rearing create barriers to accumulating immovable assets, including the home. This study identifies the determinants of home ownership among retireesgeographic, demographic, social and economic variables-and explains the effect using data drawn from five administrative areas in Saudi Arabia (Riyadh, Madina, Eastern, Jazan, and Jouf) representing planning regions (Northern, Southern, Eastern, Western and Central). A large proportion of retirees (82%) own a home (purchased before or after retirement), with regional differences. Retirees from Jouf and Jazan have higher ownership rates than their counterparts in Riyadh, Madina, or Eastern, with rates affected by geographic, demographic, social, and economic factors. As determinants, geographic and demographic factors have major roles while economic factors play a typical role in decision-making. A mix of higher education, professional employment, longer duration of employment and higher salaries, when combined with locational preferences and family requirements, motivate or enable home ownership. Retiree home-ownership is important to

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“…Gathergood (2011) studies unemployment and house price risks, and the transition into home ownership in the United Kingdom. Dröesa and Hassink (2013) measure the magnitude of idiosyncratic risk in house price risk. As far as we know, this article is the first study to explore the time series properties of the risk of house price changes relative to the risk of income changes and how house price dynamics are related to the risks.…”

Section: Introductionmentioning

confidence: 99%

International Real Estate Review

Li¹,

Yang²

2018

IRER

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We examine the relation between risk and returns in the U.S. residential housing market. We find that the risk of house price changes and the magnitude relative to the risk of income changes vary with economic conditions. We measure the excess risk of house price changes by adjusting for the risk of income changes and economic variables associated with the real estate and financial sectors of the economy, and find a significant and positive relation between house price changes and excess risk. We also find that excess risk has significantly adverse effects on the short-run momentum and long-run reversal of house price changes across metro areas, thus implying that excess risk induces price rigidity and helps to explain for the serial correlations in price changes in the U.S. single-family housing market.

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House price risk and the hedging benefits of home ownership

Cited by 16 publications

References 18 publications

Idiosyncratic Risk of House Prices: Evidence from 26 Million Home Sales

Idiosyncratic Risk of House Prices: Evidence from 26 Million Home Sales

Retiree home ownership in Saudi Arabia: the role of geographic, demographic, social and economic variables

International Real Estate Review

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