Housing Prices and Rents in Tokyo: A Comparison of Repeat Sales and Hedonic Measures

May 25, 2009Do the indices of house prices and rents behave differently depending on the estimation methods? If so, to what extent? To address these questions, we use a unique dataset that we have compiled from individual listings in a widely circulated real estate advertisement magazine. The dataset contains more than 400 thousand listings of housing prices and about one million listings of housing rents, both from 1986 to 2008, including the period of housing bubble and its burst. We find that there exists a substantial discrepancy in terms of turning points between hedonic and repeat sales indices, even though the hedonic index is adjusted for structural change and the repeat sales index is adjusted in a way Case and Shiller suggested. Specifically, the repeat sales measure tends to exhibit a delayed turn compared with the hedonic measure; for example, the hedonic measure of condominium prices hit bottom at the beginning of 2002, while the corresponding repeat-sales measure exhibits reversal only in the spring of 2004. Such a discrepancy cannot be fully removed even if we adjust the repeat sales index for depreciation (age effects).日本学術振興会・科学研究費補助金（学術創成研究費） = JSPS Grant-in-Aid for Creative Scientific Research15, 17 p