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The Cyclic Behavior of the National Office Market
Author(s) -
Wheaton William C.
Publication year - 1987
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00433
Subject(s) - real estate , economics , supply and demand , econometric model , macroeconomics , finance , econometrics
A review of the post WWII data on national office building construction and vacancy, reveals a recurrent ten‐twelve year cycle. Specifying and estimating a structural econometric model for these series leads to several conclusions about this commercial real estate sector. First, the office market appears to “clear” quite slowly, and long‐run expectations play an important role in market behavior. Second, supply is definitely more responsive to market conditions than demand. Finally, a six‐year forecast suggests that the current over‐supply in the market will not go away as fast as in the past.