Real effects of real estate: evidence from unemployment rates

Dogan, Can; Topuz, John C.

doi:10.1108/sef-03-2019-0124

Cited by 4 publications

(3 citation statements)

References 42 publications

(44 reference statements)

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“…Several other recent papers considered the impact of significant life events on real estate prices and portfolio management decisions. Dogan and Topuz (2021) investigated the statistical relationship between real estate prices and unemployment rates on a metropolitan level between 1990 and 2018. Important to our study, they highlight how real estate price shocks propagate to the real economy through unemployment rates.…”

Section: Literature Searchmentioning

confidence: 99%

Floridian bankruptcies and local property damage in the United States

Brotman

Katzman

2022

SEF

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Purpose This study aims to examine the linkage between bankruptcy filings and hurricane events. Several independent variables related to local district court bankruptcy filings are examined. The primary question posed is whether Category 3,4 and 5 hurricanes result in personal bankruptcy filings due to the real property and other damage that ensures. Design/methodology/approach Landfall hurricanes in Florida from 2001 through 2018 were examined by using the fully modified least square regression model. Descriptive statistics include elasticity measures that show statistics prior and post the passage of the Bankruptcy Abuse and Prevent and Consumer Protection Act of 2005 (BAPCPA). Findings The elasticity of housing prices was a useful statistic in explaining bankruptcy filings. Regression results indicate that bankruptcy filing occur within one year of a serious hurricane. The regression model found hurricane events and housing price trends were significant variable when predicting district court bankruptcy filings. Practical implications BAPCPA targets fraud under Chapter 7 bankruptcy filings. Unfortunately, this also had the unintended consequence of discouraging legitimated filings due to the lowering of the marginal benefit associated with filing when the “means test” is applied. Social implications Lack of flood insurance coverage and stagnant real estate prices could limit the desirability of filing under Chapter 13 resulting in an inventory of damaged properties being foreclosed. Originality/value Prior researchers relied on a descriptive approach by using percentage rates to quantify the association between hurricane damage and bankruptcy filings. By using the fully modified regression-based approach, the study herein establishes that filings occur approximately a year after the household experiences the real property loss and identifies other casual factors that influence the decision to file.

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Section: Literature Searchmentioning

confidence: 99%

Floridian bankruptcies and local property damage in the United States

Brotman

Katzman

2022

SEF

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“…4. See Zietz et al (2008) for house characteristics and house prices, Himmelberg et al (2005) for economic fundamentals and house prices, Goodhart and Hofmann (2007) for house prices and the macroeconomy, Chaney et al (2012) for real estate shocks and corporate investment, Berger et al (2018) for housing prices and consumer spending, Dogan and Topuz (2020) for house prices and unemployment.…”

Section: Notesmentioning

confidence: 99%

Short-run effects of hurricanes on the housing markets: evidence from Florida

Dogan

Hattapoglu

Hoxha

2022

IJHMA

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Purpose Many studies have shown that the intensity and the number of hurricanes are likely to increase. This paper aims to look at the immediate effects of hurricanes on the time on the market, share of houses sold and percentage of houses with price cuts in the housing market using the metropolitan statistical area-level data in Florida. Design/methodology/approach Using a difference-in-difference method, the authors estimate the impact that a hurricane has on the housing markets. Findings The authors find that a hurricane has a positive and significant effect on the time on the market. A hurricane leads to a delay of the sale of a typical house in Florida by five days. The authors test for within-year seasonality and show that these effects change with seasonality of the housing market. Markets with seasonal housing prices tend to be affected more by hurricanes than those where housing prices are not seasonal. The authors also show that effects of a hurricane are transient and fade away in a few months. The results remain significant as the hurricane intensity changes. Originality/value This is the first study to look at the short-term effects of the hurricanes and how their effects vary based on seasonality of the markets.

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“…Fleming (1997) as well as Fleming and Remolona (1999), for example, have convincingly argued that announcements of surprising data for US key economic indicators can have strong effects on bond prices and interest rates in North America. Given that the real estate market is of high importance for the US economy (see e.g., Bouchouicha & Ftiti, 2012; Dogan & Topuz, 2020) it certainly does also make sense for risk managers working in financial institutions that have no direct or indirect exposure to the real estate market in North America to monitor US housing prices as soon as they hold some fixed income securities denominated in US dollars. In fact, Bouchouicha and Ftiti (2012) have noted real estate prices are considered to be one of the channels through which monetary policy affects the US economy.…”

Section: Implications For the European Financial Services Industrymentioning

confidence: 99%

Leading indicators for US house prices: New evidence and implications for EU financial risk managers

Gonzalez

Basse²,

Saft

et al. 2021

Euro Fin Management

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This study draws on machine learning as a means to causal inference for econometric investigation. We utilize the concept of transfer entropy to examine the relationship between the US National Association of Home Builders Index and the S&P CoreLogic Case-Shiller 20 City Composite Home Price Index (SPCS20).The empirical evidence implies that the survey data can help to predict US house prices. This finding extends the results of Granger causality tests performed by Rodriguez Gonzalez et al. in 2018 using a new machine learning approach that methodologically differs from traditional methods in empirical financial research.

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Real effects of real estate: evidence from unemployment rates

Cited by 4 publications

References 42 publications

Floridian bankruptcies and local property damage in the United States

Floridian bankruptcies and local property damage in the United States

Short-run effects of hurricanes on the housing markets: evidence from Florida

Leading indicators for US house prices: New evidence and implications for EU financial risk managers

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