Price Movements on the Housing Market in Stockholm: A study on apartments when stratified by size
Abstract: This paper analyzes the differences in price performance of apartments when stratified by size, in inner city Stockholm for the period 2006 to 2008. The empirical findings are that smaller apartments have had a stronger developement both for the part of the period classified as a bust and the part of the period classified as a boom. The implications of this is that prices are fluctuating within a "span" of the assumed equilibrium. Furthermore, we have provided five possible explanations for these temporary differences in price development. These are; behavioral economics and irrational decisions, credit constraints, income deterioration, substitution effetcs, income elasticity and price inequalities on square meters.
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