Local Housing Market Research Articles

Providing local housing market information: the case of Aberdeen

ABSTRACT Information on activity in the UK housing market is provided by banks, governmental agencies, professional bodies, and real estate agencies. The information can be highly aggregated at the level of countries and may become available only with delay. This ignores the fact that real estate markets are always local and that information must be timely to be useful. In Scotland, cooperation between private sector solicitor centres and public sector academic institutions can, in principle, address both shortcomings. The paper shows this for the Aberdeen Housing Market Report, which is produced in cooperation between the Aberdeen Solicitors’ Property Centre and the University of Aberdeen.

The Price of Prosperity: Annexation, Architecture, and the Late Modernist Development Frenzy in Hawai`i

ABSTRACT Shortly after the former U.S. Territory became the fiftieth state in 1959, the firm of Minoru Yamasaki and Associates (MYA) won a competition to design a new housing project in downtown Honolulu. Queen Emma Gardens, as it came to be known, was an attempt by the Detroit-based firm to assimilate U.S.-based late modernism to a tropical climate. Yamasaki, an avid golfer, enjoyed Hawaiian vacations and pursued commissions on O`ahu, chief among them apartment buildings and an office tower, along with unbuilt proposals for hotels and shopping centres. These opportunities came as a direct result of a westward movement among mainland U.S. citizens, the architect’s Japanese heritage, and a newfound obsession with the island chain, but such developments added to significant pressures facing local housing market, raising issues of race, identity, and the displacement of the urban poor in favor of sleek modernist housing deemed “appropriate” by city officials and funded by federal initiatives. The MYA-designed Hawaiian projects illustrate how one design firm’s formal and technical ambitions change over time, largely in response to shifting desires of clients, an evolving construction industry, and a growing tourist market, all of which come together in the development of a post-war itinerant architecture.

All (economic) politics is local: Voting responses to localized price shocks during the great recession

AbstractThe connection between individual and macroeconomic conditions and voting behavior is well‐established. We contribute to the less resolved “spatial gap” in the literature that centers on how the localized economic conditions of where voters live influence their likelihood to vote. We test how space mediates the tension between voter mobilization and withdrawal in the face of economic shocks. We consider a scenario, the Great Recession, where economic shocks were quite localized and sudden, and compile an extensive dataset of all registered voters in the four‐county Tampa metropolitan area between 2006 and 2015. Using sales prices and property characteristics from the tax assessor rolls, we estimate a neighborhood‐level shock to housing values induced by the Great Recession. Results show that when we do not account for local neighborhood variation, the Great Recession is associated with a significant decrease in voter turnout. However, when we account for localized economic shocks, we find that residents in neighborhoods with negative price shocks were more likely to vote after the Recession, especially in non‐local elections. In addition, the propensity to vote increases with the size of the negative price shock. There is some evidence that variation at the neighborhood level matters more than voter‐level heterogeneity. The positive voting response is most profound in predominantly Black neighborhoods, and, to a lesser extent, in predominantly Hispanic and the lowest income neighborhoods. Increases in the propensity to vote are robust to models controlling for baseline economic vulnerabilities, such as localized unemployment, the weakness of the local housing market and exposure to sectors hit hardest by the Recession. The results indicate that dramatic and sudden changes in localized economic conditions can drive voting behavior, and in ways that are distinct from macroeconomic drivers. In addition, the housing asset channel appears to be a powerful one, which can induce significant voting responses at the national level apart from other localized economic drivers, especially among homeowners.

The Impact of Airbnb Expansion on Real Estate Speculation in Marseille’s Tourist Areas

This paper investigates the impact of Airbnb’s expansion on real estate speculation in Marseille’s tourist areas, particularly focusing on the Old Port and Le Panier districts. By analyzing the correlation between the growth of short-term rental platforms and the increase in property values, the study explores how Airbnb has transformed the housing market, contributing to speculative investment and gentrification. The research examines the reduction in long-term rental housing, the rising cost of property, and the displacement of local residents as key outcomes of Airbnb’s proliferation. Through comparisons with similar European cities such as Paris and Madrid, the paper highlights the socio-economic consequences of Airbnb-driven real estate speculation, including shifts in neighborhood demographics and the loss of affordable housing for low- and middle-income residents. The findings emphasize the need for policy interventions to mitigate the negative effects of short-term rentals on the local housing market, balancing tourism-driven economic growth with the preservation of community stability and housing accessibility.

Stimulus Policy in Uncertain Times: Evidence on the Impact in Real Estate Markets

The COVID-19 pandemic introduced historic high levels of economic and policy uncertainty alongside historic accommodative monetary and fiscal policy. Economists have theorized that uncertainty can inhibit market participants’ response to policy stimulus. We empirically tested whether the behavior of house prices following the COVID-19 pandemic is associated with changes in policy and economic uncertainty by examining a sample of 111 housing markets in the United States. We found that while accommodative monetary policy and several rounds of fiscal policy providing direct payments to households were made throughout the pandemic, house prices increased most significantly only after the uncertainty had resolved, nearly a year after the first policy moves. These effects were strongest in higher quantiles of the house price distribution and uncorrelated with the level of cash transfers received in the local housing market.

Can Property Taxation Fix China’s Housing Market?: A Regression Discontinuity Analysis

How does the housing market respond to a newly imposed value-based property tax? Based on individual property transaction data spanning seven years, we investigate the repercussions of a new property tax on the local housing market in Chongqing, China. In particular, we adopt a fuzzy regression discontinuity approach to examine the impact of the tax policy on house prices, transaction volumes, and the broader social welfare. We find that the property tax in Chongqing has not caused a reduction in house prices, but it has made a non-trivial contribution to local public finance for public housing programs. Our findings suggest that the property-tax-capitalization hypothesis is not supported in Chongqing’s context, although the tax improves wealth redistribution.

Short-term rentals and residential rents: evidence from a regulation in Santa Monica

Purpose This study aims to investigate the relationship between Airbnb and long-term residential rents, using Santa Monica, California, as a case study. In 2015, Santa Monica adopted the home sharing ordinance (HSO), a stringent regulation aimed at restricting short-term rentals (STR). This research examines the implications of this ordinance on the local housing market. Design/methodology/approach The synthetic control method (SCM) is applied to a panel data set comprising Airbnb listings and residential rents from multiple cities in Los Angeles County. This approach is used to estimate the causal effects of Santa Monica’s HSO on two outcomes: Airbnb listings and residential rents. Findings The empirical results show a 60% reduction in Airbnb listings in Santa Monica within two years of implementing the ordinance. Despite this significant decrease, the effect of the regulation on rents was not significant. Suggestive evidence indicates that the ordinance’s ineffectiveness in increasing the number of houses allocated to long-term tenants may have contributed to its negligible impact on rental rates. Originality/value To the best of the author’s knowledge, this research is the first to use the SCM for evaluating the impact of STR regulations. It offers crucial insights to policymakers on regulating platforms like Airbnb. The study reveals a scenario where a marked decrease in Airbnb activity did not lower residential rents, highlighting the need for context-specific evaluations in understanding the housing market’s dynamics. Additionally, these findings are valuable for investors considering the implications of regulatory changes in the STR sector.

Short-Term Accommodations and Long-Term Housing Challenges in the Margaret River Tourist Destination: A Perspective of Population Movement and Pricing

This study aimed to investigate the impact of short-stay accommodation (SSA) on housing dynamics, community welfare, and economic development in the Margaret River regional area. Grounded in an exploratory research paradigm, qualitative methods were used to gather insights from key stakeholders such as property owners, realtors, and council officials. Purposive sampling was utilized to select participants with diverse experiences and perspectives on SSA. Semi-structured interviews were conducted, totaling 21 interview sessions spanning almost 600 min, to capture in-depth and nuanced perspectives on SSA’s impact and regulatory landscape. Thematic analysis of the interview data, which was divided into two segments, revealed significant concerns regarding housing affordability, community well-being, and regulatory effectiveness. Additionally, the study uncovered a complex relationship between SSA and population dynamics, highlighting implications for the local housing infrastructure and market stability. The findings underscore the urgency of collaborative policy interventions to address the housing crisis and mitigate the adverse effects of SSA on local communities. Policymakers and stakeholders can utilize these insights to develop holistic strategies that prioritize equity, inclusivity, and shared prosperity in shaping the future of housing in regional areas such as Margaret River. This study contributes original insights by providing a nuanced understanding of the multifaceted implications of SSA on housing dynamics and community welfare in a regional context. By using qualitative methods and engaging key stakeholders, the research offers unique perspectives on the challenges and opportunities associated with the proliferation of SSA, thereby advancing scholarly discourse, and informing evidence-based policymaking in the field of housing studies.

Productivity Shocks of Dominant Companies and Local Housing Markets

We extend the literature on the influence of firm-level characteristics on housing markets by exploring the association between the labor productivity shocks of dominant firms and local housing prices. Using a sample of all U.S. firms from COMPUSTAT during 1980-2017, we find that the aggregate shocks of labor productivity of dominant firms at the metropolitan statistical area (MSA)-level explain for a significant portion of the local housing price changes in MSAs while controlling for other housing price determinants. About a year or more is required for the shocks to propagate through the local housing markets, which make them a viable predictor of future housing price. The productivity shock – housing price relation is stronger in areas that have more concentrated high-tech dominant firms or where dominant firms have closer links to their local non-dominant industry peers. Shocks are also more influential during economic expansion than economic contraction. Furthermore, the relation also exists at the zipcode level but the shocks propagate faster than at the MSA-level. The findings provide helpful insights for real estate practitioners and policymakers, especially in areas with a higher concentration of large companies.

The US–China Trade War: Quantify the Negative Shocks to Local Housing Markets and Land-Based Finance in Chinese Cities

The US–China trade war’s impacts on Chinese cities’ housing markets and local public finance are examined. In China, institutional reforms and ever-growing housing prices in the past resulted in land-based finance that city governments heavily rely on land sales (state-land use-right transfers) for fiscal revenues. However, the trade war has severely struck the cities’ housing markets and land sales since 2018. This article applies 2016–2019 data to a shift-share analysis and finds the following. Imposed by the US on imports from China, the retaliatory tariffs hurt Chinese cities’ production and caused employment and wage declines and firm exit. Importantly, the tariff shocks also affected housing and land markets. A one percentage point (p.p.) increases in the (weighted average) tariffs applicable to cities’ exports reduced cities’ new home sale volume by 3.1% and prices by 1.2%. Besides, city governments’ land sale revenues dropped 7.6%. Since the applicable tariffs to cities increased by 1.62 p.p. on average and 10.4 p.p. at the extreme by 2019, many cities’ housing markets and public finance have hit trouble. The resilient cities to the tariff shocks were those with less overbuilding, more population, more diversified industries or export destinations, or a stronger tertiary sector.

A study on the benefit incidence of a place-based education fee reduction program: Evidence from a local housing market in China

This paper studies an Education Fee Reduction and Exemption Program for preschool childcare in Jinan, China, to explore the benefit incidence among different stakeholders by observing how housing prices and rents change in response to this program and by employing a method of difference-in-differences combined with boundary discontinuity. The empirical findings indicate that the housing prices in the experimental area rose by 5–7 percent while the rents rose by 10–13 percent due to the capitalization effects of this equalization program. Falsification tests are conducted using artificial boundaries and fake policy implementation dates. A back-of-the-envelope welfare analysis demonstrates that a considerable portion of the program's benefits is offset by house price increases for new home buyers and rent increases for tenants, with significant distributional implications for different stakeholders.

Local constant-quality housing market liquidity indices

Market liquidity is an important aspect of housing market developments. The time on market (TOM) of sold properties is frequently used by researchers, practitioners, and policymakers as a market liquidity indicator. Compared to research on house price indices, the literature is very sparse on constructing housing market liquidity indices. This paper proposes a new method to construct constant-quality market liquidity indices based on TOM. The first contribution is that the method improves end-of-sample reliability resulting in fewer revisions. This increases the practical usefulness for business and policy purposes. The second contribution is that the applied structural time series method is designed to work in thin markets. This allows index construction at the local level.

The effect of the local economic context and local public services on financial satisfaction among youth in European cities.

The post-2008 economic recovery period has seen varying degrees of improvement in the well-being of young individuals across different countries, regions, and cities of the EU. This study contributes to the literature on the geography of well-being by examining the impact of urban economic contexts on the subjective well-being of youth in Europe, a topic that has received limited attention so far. Specifically, we investigate how the local economic context has affected financial satisfaction among the young (15-35 age group) in European cities during the recovery period after the economic crisis. We study whether living in a city with better opportunities in the labor market, on the housing market, or with better local services (e.g., education or health care) affect financial satisfaction among the young. We carried out multilevel analysis of financial satisfaction among young adults on data from the Quality of Life in European Cities survey (years 2012, 2015, 2019), which asks about aspects of quality of life among a representative sample of the population in a large number of cities in EU Member States. Overall, the results suggest that a better labor market context (where it is in general easier to find a job) has a statistically significant positive effect on financial satisfaction among the young. Our results also show that satisfaction with the financial situation among young adults is significantly higher in cities with a higher quality of local social services. On the other hand, we have found only small (and statistically non-significant) contextual effect related to the local housing market.

A Planning Support System for Monitoring Aging Neighborhoods in Germany

Many single-family homes built in Germany in the first decades following the Second World War are now occupied by elderly residents. If local conditions are unfavorable, a large number of these buildings may enter the real estate market in a short period of time and put pressure on the local housing market. Planners and decision-makers therefore need detailed spatiotemporal information about these neighborhoods to effectively address and counteract such developments. We present the design and implementation of a planning support system that can generate the required information. The architecture of this newly developed software consists of a composite, multitier framework to perform the complex tasks of data importation, data processing, and visualization. Legally mandated municipal population registers provide the key data for the calculation of indicators as a base for spatiotemporal analyses and visualizations. These registers offer high data quality in terms of completeness, logical consistency, spatial, and temporal and thematic accuracy. We demonstrate the implemented method using population data from a local government in a rural area in southwestern Germany. The results show that the new tool, which relies on open software components, is capable to identify and prioritize areas with particularly high levels of problem pressure. The tool can be used not only for analyses in a local context, but also at a regional level.

Beyond numbers: rethinking host professionalism on Airbnb

PurposeWe challenge the conventional approach to distinguish between professional and non-professional Airbnb hosts by solely using the number of managed listings.Design/methodology/approachWe leverage the recently released platform policy that categorizes hosts' professionalism by their self-declared status. Our multinomial modeling approach predicts true host status, factoring in the number of managed listings and controlling for listing and host traits. We employ data from five major European cities collected through scraping the Airbnb webpage.FindingsOur research reveals that relying solely on the number of listings managed falls short of accurately predicting the host type, leading to difficulties in evaluating the platform's impact on the local housing market and reducing the effectiveness of policy intervention. Moreover, we advocate using more fine-grained measures to differentiate further between semi-professional and professional hosts who exhibit heterogeneous economic behaviors.Research limitations/implicationsReliable professionalism metrics are essential to curb unethical practices, promote market transparency and ensure a level playing field for all market participants.Originality/valueThis work pioneers the revelation of the inadequacy of a commonly used measure for predicting host professionalism accurately.

Has Housing Filtering Stalled? Heterogeneous Outcomes in the American Housing Survey, 1985–2021

Filtering of housing units—the process through which housing units over time serve occupants with lower or higher incomes—is a primary source of low-cost housing supply in the United States. However, the extent of filtering can vary widely in response to local housing market conditions, and this variation carries implications for the affordable housing strategies used in different areas. This paper uses the American Housing Survey (AHS) panels for 1985–2013 and 2015–2021 to construct repeat income measures of filtering. The analyses then describe the extent of variation in filtering outcomes across time periods, price points, and metropolitan areas. The results show significant variation across all three domains. Temporal analyses document significant changes in the estimated filtering outcomes across multiple time periods. In particular, the estimates for 2015–2021 suggest that downward filtering of housing units stalled or reversed as housing markets tightened in recent years. The direction and extent of filtering is also shown to vary significantly across metropolitan areas with higher and lower home price appreciation. These findings highlight the importance of heterogeneity in filtering outcomes to the conclusions drawn for policy. They also provide insight into the potential limitations of filtering as a source of affordable housing supply.

Time-varying and land use-induced spillover effects of urban redevelopment: Evidence from Hong Kong

This paper investigates the time-varying and land use-induced spillover effects of urban redevelopment, providing a lens through which to understand the welfare implications of both the temporal dynamics and the land use changes that occur through urban transformation. By analysing redevelopment project and housing transaction data from Hong Kong between 2005 and 2020, we find significant, positive spillover effects of urban redevelopment on local housing prices following the redevelopment announcement, with diminishing magnitudes as the redevelopment project proceeds. We also find heterogeneous spillover effects associated with different functional land use changes in redevelopment projects. The direction and extent of these externalities depend on the trade-off between the changes in local amenities and the changes in the level of competitiveness in the local housing market.

A Local Housing Market in the Great Depression

AbstractHousing figures prominently during economic crises, a notable example being the Great Depression. Because housing is immobile, its market is very localized. In each city, the main agents are closely interconnected. Lenders depend on mortgaged homeowners and landlords to maintain payments; landlords rely on tenants; municipalities need all property owners to pay taxes. The Depression experiences of tenants, homeowners, and federal housing programs are well-appreciated; those of landlords and private lenders much less so. Considering the role of all agents, this case study of Hamilton, Ontario, focuses on owners and private lenders and asks who lost property, to whom, and how. Drawing on land registry and property tax records, city directories, and newspaper accounts, it documents the pattern and trajectory of defaults experienced by homeowners, landlords, and private lenders. Contemporaries and historians have used foreclosures as a measure of distress, but many borrowers defaulted voluntarily. The experience of Hamilton’s homeowners was similar to those in U.S. cities. Local landlords experienced higher rates of defaults than homeowners; private lenders foreclosed less often than lending institutions. Along with municipalities, both learned to be flexible in demanding payments. The high incidence of private mortgages, the stability of lending institutions, and the marginal role of the federal government were distinctively Canadian, but in general Hamilton’s experience is more broadly indicative.

Effects of House Flips on Local Housing Transactions

This study explores the possible impacts of short-term house trades, often called “house flips,” on local housing markets. Using nationally representative data across multiple U.S. housing markets during 2000–2013, we test the Spillover Hypothesis and the alternative Competition Hypothesis for the influences of flips on the neighborhood non-flip house transactions. We find that the local flip tendency, our measurement for local flip activity, is negatively associated with the holding durations of neighborhood houses experiencing non-flip resales, and positively associated with their resale prices, after we control for market conditions that affect both flip and non-flip transactions as well as other potential determinants for holding duration and price. The effects are generally more prominent when the local flip tendency is measured for a longer run, supporting the Spillover Hypothesis. These effects are also persistent regardless of whether the local flip tendency is defined as the proportion of flips in the local resales by transaction number or by transaction volume, or whether it is measured continuously or discretely. The results also hold when we endogenize the local flip tendency, or when we change the neighborhood size. These findings demonstrate the substantial influences of flip activities to the local housing market turnover and price movements.

Making sense of uncertainty: An application to the Scandinavian banking sector

AbstractWe study the impact of different sources of global, regional and local uncertainty on the seven largest Scandinavian banks over the period 2005–2018. Using a spillover approach and network analysis, we find that Swedish banks are the main source of contagion in the region and spillovers tend to increase in times of heightened uncertainty. Global economic policy uncertainty, global financial uncertainty and local housing market uncertainty affect the Scandinavian banking sector the most. By contrast, geopolitical risk spillovers are limited.