Online Information Search, Market Fundamentals and Apartment Real Estate

We examine the association between online apartment rental searches and fundamental real estate market variables namely, vacancy rates, rental rates and real estate asset price returns. We find that consumer real estate searches are significantly associated with the market fundamentals after control...

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Bibliographic Details
Published in:The journal of real estate finance and economics 2015-11, Vol.51 (4), p.480-502
Main Authors: Das, Prashant, Ziobrowski, Alan, Coulson, N. Edward
Format: Article
Language:English
Subjects:
Apartments
Economic indicators
Economic models
Economic statistics
Economic theory
Economics
Economics and Finance
Financial Services
Housing
Housing prices
Institutional investments
Internet stocks
Investors
Lessors
Real estate
Regional/Spatial Science
REITs
Searches
Stock exchanges
Studies
Trends
Vacancies
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Summary:We examine the association between online apartment rental searches and fundamental real estate market variables namely, vacancy rates, rental rates and real estate asset price returns. We find that consumer real estate searches are significantly associated with the market fundamentals after controlling for known determinants of these variables. In particular, we show that apartment rental-related online searches are endogenously and contemporaneously associated with reduced vacancy rate. However, the association between the searches and rental rates is not significant. The searches are also contemporaneously associated with positive returns on the appraised values of multifamily assets. There is some evidence that the searches are fundamentally associated with REIT returns in the short run and that REIT investors watch the online search trends to inform their stock pricing decisions.
ISSN:0895-5638
1573-045X
DOI:10.1007/s11146-015-9496-1