^aCowles Foundation for Research in Economics and International Center for Finance, Yale University, 30 Hillhouse Avenue, New Haven, CT 06520-8281, USA. E-mail: robert.shiller@yale.edu

Abstract

This paper looks for markers of ends of real estate booms or busts. The changes in market psychology and related indicators that occurred at real estate market turning points in the United States since the 1980s are compared with changes at turning points in the more distant past. In all these episodes, changes in an atmosphere of optimism about the future course of home prices, changes in public interpretation of the boom, as well as evidence of supply response to the high prices of a boom are noted.