Abstract
The rate of appreciation in the asset price of housing is shown to vary systematically with location. Differences in appreciation rates occur because asset prices depend on rates of rental price changes, and the time pattern of rental price changes should vary systematically. Based on theoretical arguments in the literature, rates of rental price appreciation should vary with location, age, and size of the unit. The hypothesis that these factors are also associated with differences in the rate of asset price change is tested using data from five SMSAs. The hypothesis is confirmed for distance from the city center and age of the unit but not for size of the housing unit.
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