Spatio-Temporal Measurement of House Price Appreciation in Underserved Areas

Abstract

In this article, we examine house price appreciation rates and volatility in underserved areas. Theseinclude (1) census tracts with median income at or below 90 percent of the area median income (AMI)and (2) tracts with a minority concentration of at least 30 percent and median income up to 120 percentof AMI. Using 1972 to 1993 data from Dade County, FL, we estimate an expanded repeat-salesmodel that accounts for both space and temporal effects simultaneously.Stressing the exploratory nature of the study, we find that appreciation rates in underserved areasdefined on the basis of median income are at least as high as those in other areas. Conversely, appreciationrates are lower in high minority areas than in the overall market.We also find that all underservedareas exhibit higher volatility than other areas, regardless of the definition used to designatethem.