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Inventories and price changes are correlated. The inverse relation is most obvious in housing where inventories build in low-demand markets and shrink in high-demand markets. This is a puzzle. Symmetry of information among buyers and sellers would seem to imply that sellers would change their reservation value by the amount that buyers change their offers. Because there is heterogeneity among buyers in the valuation of a given house, sellers set prices strategically. When demand falls, sellers rationally lower their prices, but not by enough to keep the probability of sale constant. As a result, inventories grow.

Linked networks of transactors attempting to complete both the buying and selling of properties, often termed "housing chains", are conspicuous features within owner-occupied housing markets, often seen as a cause of severe delay to transaction completion. This paper introduces a bounded or limited rationality-based model of housing market transactions and examines the properties and predictions of the resultant system. Agent-based simulation is able to reproduce: a) the existence of chains of buyers and sellers observed in the housing market; b) the delays to transaction completion often noted; and c) the empirical observation that housing price series for first-time buyers and for new or vacant housing serially leads the series for existing, current owner-occupiers.

We calculate there are 8.1% more houses in Allegheny County, PA (Pittsburgh) due to flood insurance subsidies. Conversely, if/when National Flood Insurance Program (NFIP) premiums rise by 50% to equal expected damages, property values will decrease by 8.8% in the short-term, with about half of that recuperated in the long run (4.7%) as quality-adjusted housing stocks contract by 7.5% over decades. This analysis informs community planning and current NFIP revisions that strive to balance solvency and social consequences. Furthermore, our extension of Poterba’s (1984) dynamic user-cost of housing model can be used in integrated assessment models of climate change adaptation.

Many discussions on Hong Kong’s social movements rightfully focus on the internal and external political factors that are influential in shaping the recent political events. This paper examines selective important political deve-lopments related to the subject matter and does not pretend to be comprehensive on the subject matter. While contextualizing Hong Kong’s recent unrest in political events, we are simultaneously also interested to de-privilege political factors as the sole explanation for the social movements and highlight a functional and highly utilitarian reason for the social turmoil, which is that of high housing prices and social disenfranchisement. It was the twin impacts of political changes as well as housing grievances (along with other bread and butter issues) that became a volatile cocktail in concocting the social unrest and public expressions of discontent. The central and local HK governments cannot homogenize a single uniform response to the challenges of globalization, in terms of both clamoring for democratization and economic egalitarianism. This paper therefore argues that there is a differential effectiveness of China’s/HK’s responses to economic globalization’s inequities and addressing the pro-democrat demands.

The large literature on regional inequality in the People's Republic of China (PRC) is hampered by incomplete evidence on price dispersion across space, making it hard to distinguish real and nominal inequality. The two main methods used to calculate spatial deflators have been to price a national basket of goods and services across different regions in the country or else to estimate a food Engel curve and define the deflator as that needed for nominally similar households to have the same food budget shares in all regions. Neither approach is convincing with the data available. Moreover, a focus on tradable goods such as food may be misplaced because of the emerging literature on the rapid convergence of traded goods prices within the PRC that contrasts with earlier claims of fragmented internal markets. In a setting where traded goods prices converge rapidly, the main source of price dispersion across space should come from nontraded items, and especially from housing given the fixity of land. In this paper we use newly available data on dwelling sales in urban PRC to develop spatially-disaggregated indices of house prices which are then used as spatial deflators for both provinces and core urban districts. These new deflators complement existing approaches that have relied more on traded goods prices and are used to re-examine the evidence on the level of regional inequality. Around one-quarter of the apparent spatial inequality disappears once account is taken of cost-of-living differences.

This study examines residential house price trends in the East European economies. The data are described and evaluated in terms of their quality and reliability; both official data from national statistical offices and that compiled by real estate companies are used. Current prices are evaluated in terms of the economic fundamentals in the region including GDP growth rates, interest rates, rental prices, alternative asset prices, and the availability of mortgages. The role of foreign currency mortgages is given special treatment given their importance in a number of countries and the vulnerabilities they introduce. For some of the markets a more detailed description of price trends by region or type of property is provided. Comparisons with western markets are made where appropriate. Generally it is concluded that price increases have been quite significant but any over appreciation is difficult to evaluate given the very positive changes in the economic fundamentals. In addition to price trends, the implications of the changing institutional structure of these mortgage markets are explained along with the implications of the housing market developments for consumer spending, fiscal and monetary policy. The possibility of a housing bubble and bust is examined along with its implications for the economy; policy options to minimize this likelihood and its consequences are also explored with due consideration of the limitations on macroeconomic policy options given the constraints imposed by euro accession in a number of the countries.