The accuracy of home owners' estimates of house value

Goodman, John L.; Ittner, John B.

doi:10.1016/1051-1377(92)90008-e

Cited by 227 publications

(171 citation statements)

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“…Evidence does suggest that the bias in owners' estimates is small (see below), but these estimates typically have high sampling variances (Kain and Quigley, 1972;Goodman and Ittner, 1992). This leaves much ambiguity in the interpretation of statistical results.…”

Section: Differential Wealth Effects: Theories and Evidencementioning

confidence: 99%

“…We are grateful to Kevin Moore of the Fed for assembling these data. SCF ICI 1989199219951986 0 (Kain andQuigley, 1972, andFollain andMalpezzi, 1981) to plus 6 percent (Goodman and Ittner, 1992). However, Goodman and Ittner point out that for many purposes, owners' estimates may indeed be the appropriate measures of housing wealth; household consumption and savings behavior is likely to be based upon perceived home value.…”

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confidence: 99%

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Comparing Wealth Effects: The Stock Market versus the Housing Market

Case

Quigley

Shiller

2005

Topics in Macroeconomics

862

549

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We examine the link between increases in housing wealth, financial wealth, and consumer spending. We rely upon a panel of 14 countries observed annually for various periods during the past 25 years and a panel of U.S. states observed quarterly during the 1980s and 1990s. We impute the aggregate value of owner-occupied housing, the value of financial assets, and measures of aggregate consumption for each of the geographic units over time.We estimate regression models in levels, first differences and in error-correction form, relating consumption to income and wealth measures. We find a statistically significant and rather large effect of housing wealth upon household consumption.

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Section: Differential Wealth Effects: Theories and Evidencementioning

confidence: 99%

mentioning

confidence: 99%

Comparing Wealth Effects: The Stock Market versus the Housing Market

Case

Quigley

Shiller

2005

Topics in Macroeconomics

862

549

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“…On the negative side, self-reported house prices are known for being slightly (usually in the order of <10%) biased upward (e.g. Ihlanfeldt and Martinez-Vazquez, 1986;Goodman and Ittner, 1992;Benítez-Silva et al, 2009). …”

Section: Residential Property Price Dynamicsmentioning

confidence: 99%

Household Wealth in the Euro Area: The Importance of Intergenerational Transfers, Homeownership and House Price Dynamics

2014

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The HFCN collects household-level data on households' finances and consumption in the euro area through a harmonised survey. The HFCN aims at studying in depth the micro-level structural information on euro area households' assets and liabilities. The objectives of the network are: Terms of use: Documents in1) understanding economic behaviour of individual households, developments in aggregate variables and the interactions between the two;2) evaluating the impact of shocks, policies and institutional changes on household portfolios and other variables;3) understanding the implications of heterogeneity for aggregate variables; 4) estimating choices of different households and their reaction to economic shocks; 5) building and calibrating realistic economic models incorporating heterogeneous agents; 6) gaining insights into issues such as monetary policy transmission and financial stability.The refereeing process of this paper has been co-ordinated by a team composed of Gabriel Fagan (ECB), Pirmin Fessler (Oesterreichische Nationalbank), Michalis Haliassos (Goethe University Frankfurt), Tullio Jappelli (University of Naples Federico II), Sébastien PérezDuarte (ECB), Jiri Slacalek (ECB), Federica Teppa (De Nederlandsche Bank), Peter Tufano (Oxford University) and Philip Vermeulen (ECB).The paper is released in order to make the results of HFCN research generally available, in preliminary form, to encourage comments and suggestions prior to final publication. The views expressed in the paper are the author's own and do not necessarily reflect those of the ESCB. Results from the Eurosystem Household Finance and Consumption Survey reveal substantial variation in household net wealth across euro area countries that await explanation. This paper focuses on three main factors for the wealth accumulation process, i) homeownership, ii) housing value appreciation and iii) intergenerational transfers. We show that these three factors, in addition to the common household and demographic factors, are relevant for the net wealth accumulation process in all euro area countries, and moreover that, using various decomposition techniques, differences therein, in particular in homeownership rates and house price dynamics, are important for explaining wealth differences across euro area countries. Acknowledgements This paper uses data from the Eurosystem Household Finance and Consumption Survey (HFCS

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“…For one reason, owners tend to overestimate the value of their property (Goodman and Ittner 1992) and some might not be willing to sell a property for less than they think it is worth (Genesove and Mayer 2001). In addition, property owners tend to use past transaction prices when setting list prices, which can make transaction prices slow to adjust to changes in market conditions (Anenberg 2013, Guren 2014.…”

Section: Vacancy As a Measure Of Housing Market Conditionsmentioning

confidence: 99%

Long-term vacant housing in the United States

Molloy

2016

Regional Science and Urban Economics

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Because housing is durable, the housing supply is slow to adapt to declines in demand. This paper uses long-term vacancy-defined as nonseasonal housing units that have been vacant for an unusually long period of time-to quantify the extent of excess supply in the housing market. I find that long-term vacancy is less than 2 percent of all nonseasonal housing units and accounts for only one quarter of the aggregate increase in nonseasonal vacancy from 2001 to 2011. Thus, at the national level, excess supply is considerably less extensive than indicated by traditional measures of vacancy. However, the stock of long-term vacant housing is concentrated in a small number of neighborhoods that do have appreciably high long-term vacancy rates. Some of these neighborhoods have characteristics suggesting that excess supply is related to overbuilding during the housing boom, while others have characteristics that are symptomatic of persistently weak housing demand.

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The accuracy of home owners' estimates of house value

Cited by 227 publications

References 6 publications

Comparing Wealth Effects: The Stock Market versus the Housing Market

Comparing Wealth Effects: The Stock Market versus the Housing Market

Household Wealth in the Euro Area: The Importance of Intergenerational Transfers, Homeownership and House Price Dynamics

Long-term vacant housing in the United States

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