Bubbles and contagion in English house prices

Fry, J. M. (2009): Bubbles and contagion in English house prices.

Abstract

Using methods originating from statistical physics we model bubbles in English house prices. It is found that there was a nationwide housing bubble 2002-2007. Typically prices were 30-40% over-valued and fell around 20%. London is atypical in that the level of over-pricing was lower, only around 20%, and experienced a drop in prices of only around 15%. There is some suggestion of contagious effects, with the bubble in London affecting prices in Yorkshire and the North.

• Item Type: MPRA Paper
• Language: English
• Keywords: financial crashes; super-exponential growth; illusion of certainty; contagion; housing-bubble; Enlish house prices
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C53 - Forecasting and Prediction Methods ; Simulation Methods; C - Mathematical and Quantitative Methods > C0 - General; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General

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