The 2000s Housing Cycle with 2020 Hindsight: A Neo-Kindlebergerian View

• 成果类型: Article
• 署名作者: Chodorow-Reich, Gabriel; Guren, Adam M.; McQuade, Timothy J.
• 署名单位: Harvard University; National Bureau of Economic Research; Boston University; University of California System; University of California Berkeley
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdad045
• 发表日期: 2024
• 页码: 785-816
• 关键词: residential land; negative equity; price; determinants; MARKETS; default; booms; busts; MODEL

摘要

With 2020 hindsight, the 2000s housing cycle is not a boom-bust but a boom-bust-rebound. Using a spatial equilibrium regression in which house prices are determined by income, amenities, urbanization, and supply, we show that long-run city-level fundamentals predict not only 1997-2019 price and rent growth but also the amplitude of the boom-bust-rebound. This evidence motivates our model of a cycle rooted in fundamentals. Households learn about fundamentals by observing dividends but become over-optimistic in the boom due to diagnostic expectations. A bust ensues when beliefs start to correct, exacerbated by a price-foreclosure spiral that drives prices below their long-run level. The rebound follows as prices converge to a path commensurate with higher fundamental growth. The estimated model explains the boom-bust-rebound with a single shock and accounts quantitatively for the dynamics of prices, rents, and foreclosures in cities with the largest cycles. We draw implications for asset cycles more generally.