Anja M. Hahn
Vienna University of Economics and Business & DataScience Service GmbH
Sanela Omerovic
Vienna University of Economics and Business & DataScience Service GmbH
Sofie R. Waltl
University of Cambridge & Vienna University of Economics and Business
Abstract
We develop a practical framework to holistically test for the impact of events affecting a housing market yet originating from housing-external sources. For that we classify events along three dimensions to judge which types of reactions are expected to evolve and how to formulate systematic hypotheses: prices versus quantities, supply versus demand, and immediate versus gradually evolving.
These three dimensions translate into clear guidance about which data type (deeds versus adverts) as well as hedonic modeling and testing strategy should ideally be applied. For that, we also formulate a quasi-hedonic count model allowing us to test for quantity effects complementing the classical hedonic price model.
We apply this framework to the Austrian real estate market together with a variety of overlapping and disruptive events respectively triggered by the COVID-19 pandemic, the implementation of a policy tightening lending standards as well as the cost-of-living crisis and increased mortgage interest rates.
We strategically incorporate contextual and regime variables into a hierarchical hedonic house price and a hedonic-style count model, and test for their significance. The proposed testing strategy consistently yields the expected results and by that resolves some housing market puzzles.
JEL Codes: R21; R31.
Keywords: Measuring Crises Side-effects; Housing Markets; Real Estate Prices and Quantities; Hedonic Testing Framework; Hierarchical Models; Count Models
This research benefits from funding by the OeNB Anniversary Fund, Research grant No. 18767 (LocHouse). This article uses data by Data Science Services GmbH. The views expressed are solely those of the authors and may not be shared by the data providers.
Dissemination
Poster: [2022 NOeG Winter Workshop]
Presentations (incl. scheduled): [1st Workshop on Residential Housing Markets: Perceptions and Measurement, Luxembourg][2022 NOeG Winter Workshop, Vienna][2nd Workshop on Residential Housing Markets – Connecting Housing Researchers in Austria][29th European Real Estate Society (ERES) Annual Conference at University College London][2023 NOeG Annual Meeting at the University of Salzburg][14th Geoffrey J.D. Hewings Regional Economics Workshop at WIFO in Vienna][(LIS)^2ER Workshop on Housing Policy and Wealth Inequality at LIS in Luxembourg]
Sofie R Waltl 