Local Housing Market Research Articles

The impact of COVID-19 on the housing market: evidence from the Yangtze river delta region in China

ABSTRACT We investigate the impacts of COVID-19 on the housing market in the Yangtze river delta region in China. We divide data into the groups of the municipality directly under the central government (first-tier city) and other provinces (second- and third-tier cities), and use average selling price of commercial housing to capture the performance of local housing market. The findings suggest significantly positive impacts of COVID-19 on housing price in this region, which implies the urgent needs of housing for families to stay together during the epidemic. The municipality directly under the central government (also the first-tier city) usually tends to have higher housing prices due to better economic and medical conditions and urban governance there, while such impacts shrink in the period of epidemic, implying the effective control of housing price there, which provides relevant policy guidance for other provinces and non-first-tier cities.

Managerial Extrapolation: Who and When?

We show strong over-extrapolation of earnings in the I/B/E/S managerial guidance. Firms whose earnings are less persistent, less volatile, or more salient exhibit more extrapolation. Managers who observe rapid growth in their local housing market also demonstrate more extrapolation, albeit weaker. Over-extrapolation is not particularly related to a manager’s skills or tenure. Exploiting exogenous variations in firms’ profitability resulting from the 2017 Tax Cuts and Jobs Act, we provide clean evidence that managers over-extrapolate past earnings even when earnings experience a temporary shock. Consistent with Bordalo et al. (2020) and Afrouzi et al. (2021), our findings shed light on what factors affect the degree of over-extrapolation.

Supplemental Material for Local Housing Market Dynamics Predict Rapid Shifts in Cultural Openness: A 9-Year Study Across 199 Cities

Supplemental Material for Local Housing Market Dynamics Predict Rapid Shifts in Cultural Openness: A 9-Year Study Across 199 Cities

The Effect of Relaxing Local Housing Market Regulations on the Number of Recipients of Federal Rental Housing Assistance Programs

The majority of U.S. households that qualify for federal rental housing assistance do not receive it. In the absence of an entitlement to housing assistance for all who qualify, an underexplored cause of the shortfall is that higher rents in some areas driven by supply-constraining local regulations drive up program costs, leaving fewer funds available to serve additional families. In this paper, we first show that because the federal government bears the full cost of any incremental increase in market rents in assisted housing units, stringent local regulations can substantially increase the federal cost of covering a fixed number of families. We then simulate the effect of deregulation that reduces home prices to the cost of producing a home in 11 substantially supply-constrained metropolitan areas, which we translate into reduced market rents and ultimately cost savings for federal rental housing assistance programs. We estimate that post-deregulation, the Housing Choice Voucher program and Section 8 Project-based assistance program could save a combined $3.9 billion, which could serve 13 percent (424,000) more families.

Local Housing Market Sentiments and Returns: Evidence from China

Local Housing Market Sentiments and Returns: Evidence from China

The Impact of Local Residential Land Use Restrictions on Land Values Across and within Single Family Housing Markets

We provide estimates of the impact of restrictive residential land use environments on the price of land across major American housing markets. Using micro data on vacant land purchased to develop single family housing, we implement a new empirical strategy for estimating so-called ‘zoning taxes’ – the amount by which land prices are bid up due to supply side regulations. Our results are broadly consistent with previous findings that zoning taxes are especially burdensome in large coastal markets. However, our more recent data indicates that price impacts in the big west coast markets now are the largest in the nation. In the San Francisco, Los Angeles, and Seattle metropolitan areas, the price of land everywhere within those three markets having been bid up by amounts that at least equal typical household income. Finally, we show that our zoning tax estimates are strongly positively correlated with a new measure of local housing market supply constraint (the Wharton Residential Land Use Regulatory Index of 2018). This relationship is not mechanically driven as the regulatory index is constructed from survey data that do not incorporate land or house price data in any way.

Housing options for women leaving domestic violence: the limitations of rental subsidy models

Domestic and family violence is the leading cause of female homelessness, yet social housing provision has declined in Anglophone countries like Australia and housing policy responses favour demand-side subsidies to assist with rental payments. We examine the consequences of ‘choice-based’ approaches in competitive housing markets, applying a theoretical discussion of how the neoliberal subject is supposed to respond to external shocks in an adaptive and resilient manner, and problematise assumptions that subsidies provide ‘choice’. The paper is based on findings from an [Australian Housing and Urban Research Institute-funded research project]. Analysis suggests that private market rental subsidies work well in some areas and not so well in others, depending on local housing market conditions. In some cases, women have returned to violent situations because they perceive no alternative. These findings suggest that the positing of ‘choice’ for women is rhetorical rather than real because it is conditioned by the ability to compete in high-cost private rental markets.

부동산 정책발표 전·후 외부수요가 부동산 가격에 미치는 영향 비교 연구 : 광주광역시 아파트를 중심으로

부동산 정책발표 전·후 외부수요가 부동산 가격에 미치는 영향 비교 연구 : 광주광역시 아파트를 중심으로

Dynamic relationships between commodity prices and local housing market: evidence for linear and nonlinear causality

ABSTRACT This research examines the relationship between agricultural commodity prices and the local housing market. Previous literature focuses on the unidirectional impacts from commodity prices to the local economy, but we propose that in some cases local asset markets can also influence commodity prices due to the agglomeration of commodity productions and the linkages of financial markets, and thus the causalities between them can be bilateral. In addition, according to a new regional economic model that we develop about local asset market and commodity price shocks, we further predict the causalities between the commodity prices and the local house price are nonlinear. We test these hypotheses using data of the major agricultural commodities of an agriculturally focused region – California Central Valley area. The results are consistent with our expectations: there is no evidence for linear causalities between the price returns of these agricultural commodities and the local housing market, but the nonlinear Granger causalities between them are significant.

Housing Values and the Residential Settlement of Migrants: Zooming in on Neighbourhoods in Italian Provincial Capitals

This study looks at the relationship between housing values (prices and rents) and the residential settlement of migrants in different neighbourhoods in Italian provincial capitals. We exploit here the high spatial resolution dataset on the settlement of migrants developed within the Data for Integration (D4I) project. The D4I information on resident population characteristics was merged with a dataset on housing values for civilian and economic residential units using boundaries defined by local housing market characteristics. The results suggest that: (1) more diverse neighbourhoods are also those with relatively lower housing values; (2) the relationship between housing values and the concentration of migrants is non-linear; and (3) the sign and significance of the association varies significantly depending on the origin of migrants.

When Power Plants Leave Town: Environmental Quality and the Housing Market in China

Air pollution is a major environmental issue in China. This paper exploits the relocation of two major power plants in a large Chinese city as a quasi-natural experiment to examine the effect of changes in the quality of the environment on the housing market. We use an extensive transaction dataset of new apartment units in the affected and neighboring areas. We find that the plants’ closure is associated with a 12–14% increase in prices and 13–31% rise in the volume of transactions in neighborhoods within five kilometers of the plants. We further observe a higher change in prices among more expensive houses. The estimated monthly aggregate effect of the closures on the local housing market is over 50 million US dollars during the first 2 years after the relocations.

Corporate Relocation and Housing Market Spillover

This study investigates the spillover effect of corporate headquarters relocation on the local housing market. Using a comprehensive database to identify corporate relocation events in the U.S. from 1994 to 2017, we show that moving a corporate headquarters into a district is significantly associated with housing price appreciation in the district. The growth in housing prices for districts with a corporate headquarters relocation is 10% higher than in those without. Moreover, housing prices increase in the year before the relocation, which suggests the presence of a speculation and expectation effect. Housing prices increase further until 2 years after the relocation, which demonstrates the prolonged impact of corporate relocation on the housing market. The cumulative effect over the period results in more than 30% higher growth in housing prices for districts with a corporate relocation. Further, we find a significant spatial spillover effect of corporate relocation on nearby districts’ housing markets up to 15 miles. We next examine the channels through which corporate relocation affects housing prices, including the relocating firm’s employee base, firm activity, and agglomeration economies. Lastly, we observe a marginally negative effect as a result of a headquarters moving out of a district. Overall, our study indicates that corporate relocation exhibits significant positive spillover on the local housing market.

Assessing the Impact of Public Rental Housing on the Housing Prices in Proximity: Based on the Regional and Local Level of Price Prediction Models Using Long Short-Term Memory (LSTM)

Providing adequate public rental housing (PRH) of a decent quality at a desirable location is a major challenge in many cities. Often, a prominent opponent of PRH development is its host community, driven by a belief that PRH depreciates nearby property values. While this is a persistent issue in many cities around the world, this study proposed a new approach to assessing the impact of PRH on nearby property value. This study utilized a machine learning technique called long short-term memory (LSTM) to construct a set of housing price prediction models based on 547,740 apartment transaction records from the city of Busan, South Korea. A set of apartment characteristics and proximity measures to PRH were included in the modeling process. Four geographic boundaries were analyzed: The entire region of Busan, all neighborhoods of PRH, the neighborhoods of PRH in the “favorable,” and the “less favorable” local housing market. The study produced accurate and reliable price predictions, which indicated that the proximity to PRH has a meaningful impact on nearby housing prices both at the city and the neighborhood level. The approach taken by the study can facilitate improved decision making for future PRH policies and programs.

“Live Like a Lifelong Tourist”? The Contradicting Realities of Finnish Offshore Service Workers in Athens

Contrasting the mass out-migration of the younger populace following the economic crisis in Greece and the simultaneous large inflow of refugees, the city of Athens has lately become an attractive place for tourists and lifestyle migrants. This article provides a better understanding of the marginal, yet unexplored in-migration of relatively affluent Europeans moving to Athens to work in the growing offshore service sector. Athens is an attractive place for offshore service work companies, as low salaries can be compensated for by “the sun,” “Greek culture,” and “low cost and high standard of living” (Bellos, 2019). Based on interviews with Finnish offshore workers, this article argues that the local context might not render all lifestyle migrants from wealthier countries similarly privileged. Due to their low salaries and recent changes in the local housing market fuelled by touristification, offshore service workers face a lack of affordable housing. The article further argues that affluent transnational migration is a multidimensional phenomenon, which needs to be contextualized, and which has nuanced, widespread effects on local housing markets and neighbourhood life.

Frustrating Beginnings: How Social Ties Compensate Housing Integration Barriers for Afghan Refugees in Vienna

In this article, we present findings from a recent (2017–2018) qualitative survey on the integration of Afghan refugees in Vienna. Vienna is by far the largest city in Austria with a diversified labour and housing market and a multi-faceted (migrant) economy. It doubtlessly is the most attractive ‘arrival city’ in Austria. Moreover, Vienna has received the bulk of refugees during the so-called ‘refugee crisis’ of 2015–2016 and before. The analysis will focus on Ager and Strang’s (2008) argument, which characterizes housing as a core domain in integration. Housing constitutes a potential means of supporting integration into domains other than the labour market. In the process of housing integration, researchers (Aigner, 2018; Borevi & Bengtsson, 2015) have emphasized the relevance of refugees’ social ties with family and co-ethnic groups, whereas the importance of inter-ethnic networking with members of the receiving society remains insufficiently explored. The majority of the 65 interviewees had emphasized the importance of refugees’ social ties for their efforts towards structural integration. This analysis therefore aims at describing Afghans’ challenging access paths into the local housing market, and the outstanding compensatory relevance of social ties in this process. Thus, we can identify special constraints (e.g., ‘Afghanophobia,’ exploitative conditions) and coping strategies of this under-researched ‘newcomer’ group of refugees in Austria.

Housing market shocks in italy: A GVAR approach

In this paper, we use a Global Vector Autoregression (GVAR) model to assess the spatio-temporal mechanism of house price spillovers, also known as “ripple effect”, among 93 Italian provincial housing markets, over the period 2004−2016. In order to better capture the local housing market dynamics, we use data not only on house prices but also on transaction volumes. In particular, we focus on estimating, to what extent, exogenous shocks, interpreted as negative housing demand shocks, arising from 10 Italian regional capitals, impact on their house prices and sales and how these shocks spill over to neighbours housing markets. The negative housing market demand shock hitting the GVAR model is identified by using theory-driven sign restrictions. The spatio-temporal analysis carried through impulse response functions shows that there is evidence of a “ripple effect” mainly occurring through transaction volumes.

Resurgent landlordism in a student city: urban dynamics of private rental growth

ABSTRACT Many countries have seen a remarkable revival of private-rental housing markets in recent years. Academic literature so far has focused on theorizing the political-economic drivers of reinvestment in the tenure or on charting aggregate trends. This paper adds to these literatures in several ways based on a fine-grained analysis of housing market transformations in Groningen, a medium-sized university city in The Netherlands. First, we reveal the variegated trajectories through which private-rental growth materializes on the ground and untangle the role of different types of landlords. While small-scale private landlords remain dominant, we find a clear and important trend toward property concentration. Second, we highlight variations in spatial investment strategies across landlord types. Third, we reveal how contemporary dynamics of increased landlordism play out in a medium-sized city, embedded in a context of national private rental resurgence and local housing market pressures of a growing student city.

The housing business cycle of local public finance: empirical evidence from Taiwan

ABSTRACT This paper attempts to investigate the association between local public finance and housing market. We deal with the potential endogeneity problem by utilizing two-stage-least-square (2SLS) model. Our empirical results suggest that (1) the average housing price is positively and significantly associated with local revenue. (2) The average housing price is positively associated with local expenditure, though not significantly. (3) The rise of average housing price is also proven to reduce the local deficit significantly. (4) While the flypaper effect is obvious in Taiwan’s local expenditure, the opportunistic political business cycle theory is not so significant.

The craft of urgency: performing prosperity, running capital, and the making of a buying crowd in home presales in Nanjing, China

ABSTRACT This article examines home presales – the selling of future residential properties – at the urban fringe of Nanjing, China. It argues for an analytical focus on urgency as a temporal quality that creates the local housing market and facilitates urban accumulation. I examine how urgency, grounded in a linear imagination of urban development, motivates home presales for developers, estate agents, and homebuyers. In particular, to speed up the turnaround time of investment, developers conjure up a vision of prosperity by building extravagant sales centers to organize home presales. Estate agents working at the sales center organize promotional events to attract, register, and manage a buying crowd. If properly managed, the buying crowd could reach the size of a festival-like presale, whereby hundreds of apartments are sold within one day. Capital at the urban fringe accumulates through the synchronization of these activities in which the sales center crafts an affective temporality of transaction by cultivating and managing an exuberant buying crowd. The craft of urgency emphasizes the performative agencement that assembles the condition for urgency to come into being.

The Impact of Distant Hurricanes on Perception of Flood Risk in Local Housing Markets

This study investigates whether the local housing markets can be affected by the occurrence of a large-scale but distant hurricane without direct impact. Using a dataset of residential transactions in Miami-Dade County, FL between 2005 and 2014, we find that the impact of a property’s flood risk exposure on its value varies over time, with a price penalty of 4% in hurricane striking period. By contrast, within a quiet hurricane period, properties within high flood hazard zones demand a price premium ranging roughly from 4% to 6%, which may represent the price impact of water-related amenities. The premium declined significantly upon Hurricane Sandy. Several possible explanations are provided and tested to explain the main findings. Our findings indicate that the occurrence of a disastrous hurricane which impacted faraway regions also raised local home buyers’ perception of flood risk, but for a short period of time (one quarter).