House Prices and Fundamentals: 355 Years of Evidence

Brent W. Ambrose, Piet Eichholtz, Thies Lindenthal

Research output: Contribution to journalArticle

46 Citations (Scopus)

Abstract

This paper examines the long-run relation between prices and rents for houses in Amsterdam from 1650 to 2005. We estimate the deviation of house prices from fundamentals and find that these deviations can be persistent and long-lasting. Furthermore, we look at the feedback mechanisms between housing market fundamentals and prices, and find that market correction of the mispricing occurs mainly through prices not rents. This correction back to equilibrium, however, can take decades.

Original languageEnglish (US)
Pages (from-to)477-491
Number of pages15
JournalJournal of Money, Credit and Banking
Volume45
Issue number2-3
DOIs
StatePublished - Mar 1 2013

Fingerprint

House prices
Deviation
Rent
Housing market
Feedback mechanism
Mispricing

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

Cite this

Ambrose, Brent W. ; Eichholtz, Piet ; Lindenthal, Thies. / House Prices and Fundamentals : 355 Years of Evidence. In: Journal of Money, Credit and Banking. 2013 ; Vol. 45, No. 2-3. pp. 477-491.
@article{9ef5f0d9abe84bd083c927667d0d2dd9,
title = "House Prices and Fundamentals: 355 Years of Evidence",
abstract = "This paper examines the long-run relation between prices and rents for houses in Amsterdam from 1650 to 2005. We estimate the deviation of house prices from fundamentals and find that these deviations can be persistent and long-lasting. Furthermore, we look at the feedback mechanisms between housing market fundamentals and prices, and find that market correction of the mispricing occurs mainly through prices not rents. This correction back to equilibrium, however, can take decades.",
author = "Ambrose, {Brent W.} and Piet Eichholtz and Thies Lindenthal",
year = "2013",
month = "3",
day = "1",
doi = "10.1111/jmcb.12011",
language = "English (US)",
volume = "45",
pages = "477--491",
journal = "Journal of Money, Credit and Banking",
issn = "0022-2879",
publisher = "Wiley-Blackwell",
number = "2-3",

}

House Prices and Fundamentals : 355 Years of Evidence. / Ambrose, Brent W.; Eichholtz, Piet; Lindenthal, Thies.

In: Journal of Money, Credit and Banking, Vol. 45, No. 2-3, 01.03.2013, p. 477-491.

Research output: Contribution to journalArticle

TY - JOUR

T1 - House Prices and Fundamentals

T2 - 355 Years of Evidence

AU - Ambrose, Brent W.

AU - Eichholtz, Piet

AU - Lindenthal, Thies

PY - 2013/3/1

Y1 - 2013/3/1

N2 - This paper examines the long-run relation between prices and rents for houses in Amsterdam from 1650 to 2005. We estimate the deviation of house prices from fundamentals and find that these deviations can be persistent and long-lasting. Furthermore, we look at the feedback mechanisms between housing market fundamentals and prices, and find that market correction of the mispricing occurs mainly through prices not rents. This correction back to equilibrium, however, can take decades.

AB - This paper examines the long-run relation between prices and rents for houses in Amsterdam from 1650 to 2005. We estimate the deviation of house prices from fundamentals and find that these deviations can be persistent and long-lasting. Furthermore, we look at the feedback mechanisms between housing market fundamentals and prices, and find that market correction of the mispricing occurs mainly through prices not rents. This correction back to equilibrium, however, can take decades.

UR - http://www.scopus.com/inward/record.url?scp=84875293827&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84875293827&partnerID=8YFLogxK

U2 - 10.1111/jmcb.12011

DO - 10.1111/jmcb.12011

M3 - Article

AN - SCOPUS:84875293827

VL - 45

SP - 477

EP - 491

JO - Journal of Money, Credit and Banking

JF - Journal of Money, Credit and Banking

SN - 0022-2879

IS - 2-3

ER -