Abstract
Halting the decline in U.S. housing prices is often mentioned as the condition for resolving the financial crisis stemming from the American sub-prime shock. Since 2000, U.S. house prices have risen steeply and subsequently plummeted back down. In Japan, a similar kind of rise and fall in house prices was experienced from the mid-1980s through the 1990s. Accordingly, the purpose of this study is to compare the Japanese and U.S. housing markets and explore the similarities and differences between the two, especially focusing on "housing demand" and "the volume of housing sales". A notable problem in Japan is the fact that no index exists that enables us to capture fluctuations in house prices. The various real estate price indicators that we typically see, as typified by Public Land Prices, are based on appraisals, are not quality adjustment. We use the quality-adjustment house price index estimated by Shimizu and Watanabe (2009). Next, we will turn to a representative studies by Mankiw and Well (1989) and Wheaton and Lee (2009) analyzing U.S. house prices. Mankiw and Weil (1989) focused on demand-side, changes in U.S. population characteristics and forecasted future house prices. Wheaton and Lee (2009) focused on supply-side, changes in U.S. housing transactions and house prices. In this study, we will compare the relationship between changes in house price and changes in demand based on population characteristics and supply based on the volume of housing sales in Japan and the U.S.
