Jun 8, 2011

Do Google searches for "housing bubble" correlate with an index of housing prices?

Google searches for "housing bubble"

Note that the horizontal scales do not match.

People started to search for "housing bubble" after the prices had started to increase. Note that the slope of the graph of searches is much more steeper than the index of housing prices. It seems like both reached their peak at the same time.

Not much evidence that the statistics of searches in Google can be used as a leading indicator, in this case at least. Obviously, a quantitative analysis is needed to confirm this quick observational results.

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