Oklahoma State Home Builders Association

An Affiliate of the National Home Builders Association

Volatile prices scare investors away ... except in housing market

 
Posted on July 24, 2015 by By Carol Hartzog Communications

Editor's note: The link to this article was provided by the NAHB's Housing Headlines, a weekly email containing compilation of the week's top housing news.

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Price volatility in uncertain markets tends to scare investors away. This is why when volatility jumps in the stock markets, potential buyers hold on to their orders as sellers send prices tumbling.

But if jumping into uncertain waters doesn't feel good, then why is it that researchers found that the more uncertain prices are in the housing market, the more that people dive in and buy?

James Banks, Richard Blundell, Zoé Oldfield, and James P. Smith studied the relative volatility of different housing markets in the US and UK and found two big things: People are more likely to purchase a home earlier in life in places that have high price volatility, and people are more likely to move up to a larger house in those same uncertain conditions.

The researchers acknowledge this seems to go against ... Read the post at the Business Insider website

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