Abstract and Keywords
Average quarterly price changes in six contiguous southern California cities are obtained and used, first, to determine if price changes in contiguous cities are spatiotemporally contagious, then to forecast each city’s average prices for four quarters (or one year, 2014). In order to capture the contagious effects, a spatiotemporal contagion response measure is proposed and computed. The measure quantifies the responsiveness of residential home-price changes in one location (or city) to lagged price changes in another location. Average home characteristics (such as square footage and number of bedrooms), as well as lagged average quarterly mortgage rates, lagged average quarterly unemployment rates, and lagged average quarterly price changes of all locations, are input variables used to estimate the response measures and produce price forecasts. Models and forecasts are obtained first using genetic programming then compared to outcomes obtained using linear regressions.
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