The House Price-Vacancy Curve
||Lerbs, Oliver; Markus Teske
||The House Price-Vacancy Curve
||23rd Annual European Real Estate Society Conference in Regensburg, Germany
||Individual selling prices and vacancy rates in the housing market rendera close analogy to the „wage curve“, a popular concept in labor economicsthat describes how individual wages decrease with higher local unemployment.While housing search and matching models strongly suggest a stable inverse relationship, there is still a lack of convincing empirical research onthe sensitivity of house prices to local vacancy variation. Based on almost8,000 single-family home transactions and controlling for a broad range ofproperty- and neighborhood-level characteristics in hedonic regressions, thispaper confirms a robust negative link between individual home prices andresidential vacancies. The economic size of the relationship is very similaracross the three analyzed states: a doubling of the vacancy rate at the municipality level is associated with an 8-12% discount in selling prices, yielding evidence of a „house price-vacancy curve“.
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||Residential Real Estate
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