A Sentiment Index of the Housing Market: Text Mining of Narratives on Social Media

38 Pages Posted: 15 Aug 2018

See all articles by Enwei Zhu

Enwei Zhu

Tsinghua University - Hang Lung Center for Real Estate; Tsinghua University - Department of Construction Management

Jing Wu

Tsinghua University - Hang Lung Center for Real Estate; Tsinghua University - Department of Construction Management

Hongyu Liu

Tsinghua University - Institute of Real Estate Studies

Keyang Li

University of International Business and Economics (UIBE) - School of International Trade and Economics

Date Written: April 22, 2018

Abstract

Many efforts have been made to measure investor sentiment in financial markets, but only a few studies focus on housing markets. We build sentiment indexes for the Chinese housing market while observing that house price narratives are abundantly documented on social media. With the help of cutting-edge text analysis techniques from the deep learning and natural language processing fields, our indexes provide a solid basis for understanding the semantic meanings of textual data. Highlighting the temporality of text, we build separate future and past sentiment indexes to capture people’s prior beliefs and posterior feelings about price movements, respectively. The future sentiment index could serve as an alternative to survey-based expectations, measure the impacts of policies on people’s beliefs, and have remarkable power in predicting the future movements of both house prices and listed developers’ stock prices.

Keywords: Investor sentiment, Narrative economics, Housing market, Text mining, Social media, Deep learning

Suggested Citation

Zhu, Enwei and Wu, Jing and Liu, Hongyu and Li, Keyang, A Sentiment Index of the Housing Market: Text Mining of Narratives on Social Media (April 22, 2018). Available at SSRN: https://ssrn.com/abstract=3223566 or http://dx.doi.org/10.2139/ssrn.3223566

Enwei Zhu

Tsinghua University - Hang Lung Center for Real Estate ( email )

HeShanHeng Building
Beijing, 100084
China

Tsinghua University - Department of Construction Management ( email )

Heshanheng Building
Tsinghua University
Beijing, 100084
China

Jing Wu (Contact Author)

Tsinghua University - Hang Lung Center for Real Estate ( email )

HeShanHeng Building
Beijing, 100084
China

HOME PAGE: http://thuwujing.net

Tsinghua University - Department of Construction Management ( email )

Heshanheng Building
Tsinghua University
Beijing, 100084
China

HOME PAGE: http://thuwujing.net

Hongyu Liu

Tsinghua University - Institute of Real Estate Studies ( email )

School of Civil Engineering
Beijing, 100084
China
8610-62795115 (Phone)
8610-62788678 (Fax)

Keyang Li

University of International Business and Economics (UIBE) - School of International Trade and Economics ( email )

10 East Huixin Street
Chaouang District
Beijing, 100029
China

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