تجزیه و تحلیل بازار املاک و مستغلات در لاس وگاس: حباب، الگوهای فصلی، و پیش بینی شاخص CSW

We analyze 27 house price indices of Las Vegas from June 1983 to March 2005, corresponding to 27 different zip codes. These analyses confirm the existence of a real estate bubble, defined as a price acceleration faster than exponential, which is found, however, to be confined to a rather limited time interval in the recent past from approximately 2003 to mid-2004 and has progressively transformed into a more normal growth rate comparable to pre-bubble levels in 2005. There has been no bubble till 2002 except for a medium-sized surge in 1990. In addition, we have identified a strong yearly periodicity which provides a good potential for fine-tuned prediction from month to month. A monthly monitoring using a model that we have developed could confirm, by testing the intra-year structure, if indeed the market has returned to “normal” or if more turbulence is expected ahead. We predict the evolution of the indices one year ahead, which is validated with new data up to September 2006. The present analysis demonstrates the existence of very significant variations at the local scale, in the sense that the bubble in Las Vegas seems to have preceded the more global USA bubble and has ended approximately two years earlier (mid-2004 for Las Vegas compared with mid-2006 for the whole of the USA).

We analyzed the deflated quarterly average sales prices p(t)p(t) from December 1992 to December 2002 of new houses sold in all the states in the USA and by regions (northeast, midwest, south and west) and found that, while there was undoubtedly a strong growth rate, there was no evidence of a bubble in the latest six years (as qualified by a super-exponential growth) [1]. Then, we analyzed the quarterly average sale prices of new houses sold in the USA as a whole, in the northeast, midwest, south, and west of the USA, in each of the 50 states and the District of Columbia (DC) of the USA up to the first quarter of 2005, to determine whether they have grown faster-than-exponential (which is taken as the diagnostic of a bubble) [2]. We found that 22 states (mostly Northeast and West) exhibit clear-cut signatures of a fast growing bubble. From the analysis of the S&P 500 Home Index, we concluded that the turning point of the bubble would probably occur around mid-2006. The specific statement found at the bottom of page 306 of Ref. [2] is: “We observe a good stability of the predicted tc≈mid-2006tc≈mid-2006 for the two LPPL models (2) and (3). The spread of tctc is larger for the second-order LPPL fits but brackets mid-2006. As mentioned before, the power-law fits are not reliable. We conclude that the turning point of the bubble will probably occur around mid-2006.” It should be stressed that these studies departed from most other reports by analysts and consulting firms on real estate prices in that we did not characterize the housing market as overpriced in 2003 [1] and [2]. It is only in 2004–2005 that we confirmed that the signatures of an unsustainable bubble path has been revealed. Let us briefly analyze how this prediction has fared. The upper panel of Fig. 1 shows the quarterly house price indices (HPIs) in the 21 states and in the DC from 1994 to the fourth quarter of 2006 released by the OFHEO. It is evident that the growth in most of these 22 HPIs has slowed down or even stopped during the year of 2006. When we look at the S&P Case–Shiller Home Indices of the 20 major US cities, as illustrated in the lower panel of Fig. 1, we observe that the majority of the S&P/CSIs had a maximum denoted by a solid dot in the middle of 2006, validating our prediction [2]. Specifically, the times of the maxima are, respectively, 2006/06/01, 2006/09/01, 2005/11/01, 2006/05/01, 2006/08/01, 2006/05/01, 2006/12/01, 2006/07/01, 2006/08/01, 2006/09/01, 2005/09/01, 2005/12/01, 2006/09/01, 2006/09/01, 2006/08/01, 2006/06/01, 2006/07/01, 2006/09/01, 2006/08/01, 2006/12/01, 2006/06/01, and 2006/07/01 for the 20 cities shown in the legend of the lower panel. The only two cities with a maximum occurring later towards the end of 2006 (2006/12/01) are Miami and Seattle. However, their growth rates decreased remarkably in 2006 as shown in the figure. Furthermore, the S&P/CS Home Price Composite-10 reached its historical high 226.29 on 2006/06/01 and the Composite-20 culminated to 206.53 on 2006/07/01, again confirming remarkably well the validity of our forecast [2]. In this note, we provide a more regional study of the diagnostic of bubbles and the prediction of their demise. Specifically, we analyze the Case–Shiller–Weiss (CSW) Zip Code Indices of 27 different Las Vegas regions calculated with a monthly rate from June 1983 to March 2005. The CSW Indices are based on the so-called repeat sales methods which directly measure house price appreciations. The key to these data is that they are observations of multiple transactions on the same property, repeated over many properties and then pooled in an index. Prices from different time periods are combined to create “matched pairs,” providing a direct measure of price changes for a given property over a known period of time. The basic repeat sales method was proposed over four decades ago [3], but only after the work by Case and Shiller did the idea receive significant attention in the housing research community [4], [5] and [6]. Studying the Las Vegas database is particularly suitable since Las Vegas belongs to a state which was identified as one of the 22 states with a fast growing bubble in 2005 [2]. With access to 27 different CSW Zip Code Indices of Las Vegas, we are able to obtain more reliable and fine-grained measures, which both confirm and extend our previous analyses [1] and [2]. The next section recalls the conceptual background underlying our empirical approach. Then, Section 3 analyzes the regional CSW indices for Las Vegas, showing that there is a regime shift separated by a bubble around year 2004. Section 4 identifies and then analyzes the yearly periodicity and intra-year pattern detected in the growth rate of the regional CSW indices. Section 5 offers a preliminary forecast based on the periodicity analyses in Section 4. Section 6 concludes.

We have analyzed 27 HPIs of Las Vegas from June 1983 to March 2005, corresponding to 27 different zip codes. These analyses confirm the existence of a real estate bubble, defined as a price acceleration faster than exponential. This bubble is found, however, to be confined to a rather limited time interval in the recent past from approximately 2003 to mid-2004 and has progressively transformed into a more normal growth rate in 2005. The data up to mid-2005 suggest that the current growth rate has now come back to pre-bubble levels. We conclude that there has been no bubble from 1990 to 2002 except for a medium-sized surge in 1995, then a short-lived but very strong bubble until mid-2004 which has been followed by a smoothed transition back to what appears to be normal. It thus seems that, while the strength of the real estate bubble has been very strong over the period 2003–2004, the price appreciation rate has returned basically to normal. In addition, we have identified a strong yearly periodicity which provides a good potential for fine-tuned prediction from month to month. As the intra-year structure is likely a genuine non-artificial phenomenon, it offers a remarkable opportunity for monitoring in real time the normal versus abnormal evolution of the market and also for developing forecasts on a monthly time horizon. In particular, a monthly monitoring using a model that we have developed here could confirm, by testing the intra-year structure, if indeed the market has returned to “normal” or if more turbulence is expected ahead. In addition, it would provide a real-time observatory of upsurges and other anomalous behavior at the monthly scale. This requires additional technical developments and tests beyond this report. Compared with our previous analysis at the scale of states and whole regions (northeast, midwest, south and west) [1] and [2], the present analysis demonstrates the existence of very significant variations at the local scale, in the sense that the bubble in Las Vegas seems to have preceded the more global USA bubble and has ended approximately two years earlier (mid-2004 for Las Vegas compared with mid-2006 for the whole of the USA).