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The Anchoring Effect of Historical Peak to House Price

The Journal of real estate research, 2019-07, Vol.41 (3), p.443-472 [Peer Reviewed Journal]

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Title:
The Anchoring Effect of Historical Peak to House Price
Author: Shie, Fu Shuen
Subjects: Affinity ; Anchoring ; History ; Households ; Houses ; Housing market ; Housing prices ; Memory ; Perceptions ; Prices ; Real estate ; Real estate appraisal ; Securities markets ; Stock exchanges ; Stock market ; Stock prices
Is Part Of: The Journal of real estate research, 2019-07, Vol.41 (3), p.443-472
Description: Recent research has found significant evidence of a 52-week high affinity effect in the stock market. A stock's historical highest price, in the previous 52 weeks, approximately one year, exhibits an anchoring effect on investor decisions. In this paper, I examine whether the highest past price, over several years, can contribute to predicting returns in the real estate market. I find the 9-year high has a positive relation with the return of house prices, while the 2-year high shows a negative relationship in the U.S. housing market. Additionally, economic variables have differing effects on the behaviors of households when considering prices within the context of the threshold point of the highest price of the previous years. This is the first investigation to highlight the importance of an я-year high in the housing market.
Publisher: Clemson: Taylor & Francis Ltd
Language: English
Identifier: ISSN: 0896-5803
EISSN: 2691-1175
DOI: 10.22300/0896-5803.41.3.443
Source: ProQuest Central

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