The Margin of Safety and Turning Points in House Prices: Observations from Three Developed Markets

Posted: 12 Jun 2011

See all articles by Mitsuru Mizuno

Mitsuru Mizuno

Nihon University - Graduate School of Business

Isaac T. Tabner

University of Stirling - Accounting and Finance Division

Date Written: June 9, 2011

Abstract

Using quarterly data from 1960 (United Kingdom), 1963 (United States), and 1977 (Japan) through the second quarter (Q2) of 2010 (all three markets), the authors examined long-run mean-reverting relationships between house prices and inflation, disposable income, GDP, and rents. At the end of Q2 2010, U.S. prices were below their mean-reverting levels and at the lower end of their historical range. Equivalent U.K. and Japanese prices were at or slightly above their mean-reverting levels.

Keywords: Economics, Aggregate Demand and Aggregate Supply, Expectations and Economic Policy, Business Cycles, Widely-Used Measures of Economic Activity, Market Forces of Supply and Demand, Elasticity

Suggested Citation

Mizuno, Mitsuru and Tabner, Isaac T., The Margin of Safety and Turning Points in House Prices: Observations from Three Developed Markets (June 9, 2011). Financial Analysts Journal, Vol. 67, No. 3, 2011. Available at SSRN: https://ssrn.com/abstract=1861448

Mitsuru Mizuno (Contact Author)

Nihon University - Graduate School of Business ( email )

Kudanminami 4-8-24
Chiyoda-ku
Tokyo 102-8275
Japan

Isaac T. Tabner

University of Stirling - Accounting and Finance Division ( email )

Accounting and Finance Division
University of Stirling
Stirling FK9 4LA, Scotland
United Kingdom
44 (0) 1786 467305 (Phone)
44 (0) 1786 467308 (Fax)

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