RE market correlation?

Discussion in 'Economics' started by shelupinin, Apr 6, 2007.

  1. Hi !
    I live in eastern europe country and I see a huge real estate price gain over last 3 years. I know that same thing happens in USA and Europe. Local RE prices are totally disconnected from fundamentals, with average salary $200/month it is crazy to have RE prices > $1000/sq.m. Looks like the prices just correlate with global price gain, not with local fundamentals. Coudl someone give a link to charts with RE price correlation around the globe, between USA/Europe/Asia etc. Thanks.
  2. moo


    Good question. I don't think such charts exist. At least I haven't found any.
  3. 2005 Federal Reserve study (long) has many charts.

    Short answer - - yes correlated, but Germany was a puzzle at the time.

    Spain is a similar overbuilt train wreck like the US in second homes.
  4. there are a lot of talks on ET forum regarding US housing, so I don't think it should be a problem to find US RE price charts, but I have no idea where to find price charts for EU countries :( Any idea?
  5. Nothing is correlated with anything else

    equity markets course world economies is really one with many sub systems...
    look at as if a human body...sub systems heart.. Liver...etc
    but one body...
    so correlating the heartbeat with cubic liters of air being breathed...
    OK...Might be true...but not always...
    I.e when doing yoga breathing exersie...the heart slows
    more cubic liters...See what I mean?
    Not only that I am talking this...
    I tested simple correlation matrix of 100 by 100
    to AI...
    I say forget that story for life
    Correlation is just a convinet way to do things..
    I teach stats for Under gradutes by the way...
  6. if local prices has no correlation with world RE price gain, then HOW they can be $1000-$2000/sq.m. if local salary is $200/month?????????????
  7. People might buy a house together with other people. If banks and finance companies are willing to loan money for real estate purchase then some people might buy at high prices.

    USA housing prices:

    Also a futures market for real estate prices and trading:

    Prices of houses
    <img src= \img>
    might not be the only surprise in the real estate business.