Price Of Single-family Homes Research Articles

Navigating the 2023 US Housing Market: Impact on Residential Mortgage-Backed Securities

This article discusses the outlook for the US housing market and its expected impact on the trading dynamics of residential mortgage-backed securities (RMBS) in 2023. Despite the current reduced affordability of housing due to higher mortgage rates and surging home values, single family home prices are unlikely to experience a sharp decline, with growth expected in the second half of the year. The limited housing supply will lead to increased upward pressure on home prices and stronger performance in RMBS. Non-Qualified Mortgage (non-QM) products may face a challenging year in 2023, with delinquencies and losses expected to rise. Credit performance will be critical, and demand for affordability products is likely to increase. Overall, the outlook for the RMBS market remains challenging due to rising interest rates, tightening monetary policy, and the expected increase in the supply of MBS. However, the high level of home equity in the US housing market will create skin in the game for borrowers as well as higher collateral values to protect against credit deterioration.

Determinants of county-level rent levels: a Bayesian model averaging approach

ABSTRACT This paper uses Bayesian Model Averaging (BMA) to account for model uncertainty and to identify the robust determinants of county-level rent levels for a panel of 111 counties and independent cities in Virginia from 2008 to 2017. Of the fifteen determinants tested, the results show that single-family home prices, per capita education spending, and educational attainment are robust and positively associated with rent levels, while unemployment rate, population density, labour force participation, and the percent of the population that is Latino are robust and negatively associated with rent levels.

COVID-19 and the Future of Urban Life

The COVID-19 pandemic has caused unimaginable adversity, with nations across the globe devising ways to cope with the loss of life, economic productivity, and social fabric. Due to the agnostic nature of the virus, no facet of society, whether in the Global North or South, has been left untouched. As beacons of economic and social agglomeration, the pre-pandemic city, in particular, has seen a rapid transformation, in often unforeseen directions. Local businesses have shuttered, while large technology companies have thrived; offices have closed, while their adjacent streets have been opened for active mobility and social activities; apartment rents have decreased, while single-family home prices have increased; the underprivileged have been adversely affected by both the virus as well as the economic reality of the pandemic, while the affluent have been largely untouched in both health and economy. Responses to COVID-19 in various nations have only exacerbated existing socioeconomic inequities, and, expectedly, not all federal, state, or local responses have been beneficial to all strata of society. This white paper focuses on several core themes that have evolved over the course of the pandemic and have behaved differently across geographies: (1) urban economics and equity (2) social and economic power dynamics, and (3) strategies to preserve urban social and economic systems.

Vliv prostorové regulace na nabídku nového bydlení v České republice

The aim of the article is to quantify the implicit costs of land use regulations on the prices of new housing (flats and single-family homes) in Prague, Brno, Pilsen and Olomouc during the period 2013-2020. The main method is based on a comparison of new housing prices with construction costs. Furthermore, in the case of single-family homes, a hedonic model is constructed to determine the intrinsic value of land without regulation effects. The research concludes that the costs of regulation are considerable and increasing over time. The results show that the effects are more pronounced on flat markets compared to single-family home markets, the construction of which is subject to simplified permitting processes. The highest level of burden is identified on the flat market in Prague, where regulation can explain up to 44% of the market price. On the contrary, the price of single-family homes in Olomouc approximately corresponds to the sum of construction costs and the value of the land.

Do Higher Land Costs for New Single-Family Housing Inhibit Economic Activity in U.S. Metropolitan Areas?

The price of a new home is greater if the land to put it on costs more. In many U.S. metropolitan areas, this generates the widely acknowledged equity concern that low- to moderate-income households spend disproportionately on housing. But high residential land prices translating into high single-family home prices may also generate the efficiency concern of discouraging new workers’ entry into such areas or encouraging existing workers’ exit. The result could be a decrease in economic activity. This research offers panel-data regression evidence in support of the existence of this adverse outcome. Perhaps these findings can raise the saliency of the needed state or federal government intervention to curtail the stringency of local residential land-use regulations. NIMBYs see these land-use regulations as in their jurisdiction’s best interest, but as demonstrated here, such restrictions impose additional metro-wide economic concerns.

Urbanity, Financial Crisis and the Timing of Homebuying Decisions by Young Households

Large urban areas have a high appeal to young households, particularly highly educated ones, as they offer higher wages, more job opportunities and urban amenities. However, large urban areas are also characterized by higher rental rates and single-family home prices. We investigate the timing of homebuying decisions by young households (25 to 28 years) in large metropolitan (metro) areas compared to young households in other areas. Using the PSID database and Cox regression, we find that wealth, likelihood to move, being married, race and macro-economic variables affect the timing of homebuying decisions of young households irrespective of where they live. However, income is more important for the timing of homebuying decisions by young households in large metro areas than other areas and a college education is less important. Furthermore, large metro households are more likely to delay homeownership than households in other areas. In poor economic conditions such as the 2007 to 2009 financial crisis, mobility considerations are predominantly driving the timing of homebuying decisions by large metro households while income is most important for homebuying decisions of young households in other areas. Our results suggest that young homebuyers in large metro areas differ from those in other areas and that urbanity is important in understanding homebuyer behavior.

Capitalization of interconnected active transportation infrastructure

This paper investigates the capitalized value of interconnected active transportation infrastructure in Franklin County, Ohio. We expand on the existing literature on preferences for local amenities by examining the impact of connections between local amenities and active transportation infrastructure on the sales price of single family homes. Hedonic results indicate that proximity to bike facilities results in positive capitalization, with on-road facilities driving this result. Extending the analysis to examine interconnectivity, we find that bike facility capitalization is heterogeneous depending on the types of local amenities and infrastructure links. For example, on-road facility connections with bus stop locations decrease nearby home values, while on-road facilities linked to local open space increase the value of proximate homes. Together, these results provide evidence that connectivity is an important input to active transportation planning.

The Resilience of the Premium for Homes in New Urbanist Neighborhoods

In this study, I analyze longitudinal differences in single-family home prices in two new urbanist neighborhoods versus surrounding conventional neighborhoods. Using data on 78,513 single-family home sales transactions in Montgomery County, Maryland, I adopt a novel multilevel methodology to assess the effects of neighborhood demographic, economic, and locational characteristics as well as the effects of year on home prices. Results support empirical evidence on the premium that buyers willingly pay for homes in new urbanist neighborhoods. Year effects indicate that the premium withstood the Great Recession quite well.

The impact of historic district designation on the prices of single-family homes in the oldest city in the United States, St. Augustine, Florida

This empirical investigation applies a hedonic pricing model to estimate how much historic district designation has influenced the sales price of single-family houses in the oldest city in the United States, namely, St. Augustine, Florida. There were sufficient data in this context to study a total of 4017 single-family houses for a 6-year period from 2008 to 2013. The semi-log and piecewise regression estimations reveal that the natural log of the sales price of a single-family house in the city of St. Augustine was positively affected by designation as national historic district in six of the seven districts, with robust results obtained for five of the districts. Moreover, the estimated premiums for historic designation were larger than those found in other similar studies, most of which were conducted prior to the Great Recession. This study also derives several other conclusions about the effects of recession variables, as well as other exterior characteristics, interior characteristics and spatial control variables, a number of which are not commonly explored in similar studies.

The Impact of Hurricane Mitigation Features and Inspection Information on House Prices

This paper examines the effect of hurricane mitigation features and their verification on the transaction prices of single-family homes. Some of these features are obvious to buyers and sellers (visible) and others are not easily observed (hidden). Prior research on the relationship between these features and house prices has implicitly assumed that the features are known and that buyers and sellers are equally informed. This paper contributes to the literature by examining the potentially different effects of the visible and hidden features, and the verification of each, on prices in an environment of incomplete and asymmetric buyer-seller information. We assemble a dataset that includes sale information on all detached single-family residential properties in Miami-Dade County merged with a dataset of insured properties from Citizens Property Insurance Corporation. Using a treatment effects model, we find that properties with both visible and hidden mitigation features that have been verified by inspection sell, on average, at prices approximately 10% higher than properties where the features have not been verified, ceteris paribus. The results also indicate that although visible and hidden features differ significantly in their effects on price, the magnitude of the effect of the inspection on price is surprisingly similar whether features are visible or hidden. Our findings indicate that the price effect of the inspection is due to a combination of the risk mitigating benefits of the features and the insurance premium credits they represent.

The Impact of Taxes and HOA Fees on Single-Family Home Prices

This empirical study utilizes a hedonic pricing model and a large dataset to investigate how property taxes and homeowners association (HOA) fees were capitalized into the real price of single-family homes from 2002 through 2013 in Duval County, Northeast Florida. The findings suggest that the real price was negatively impacted by real city and county property taxes, but positively affected by membership in an HOA. These findings are consistent with earlier research and have implications for government policy makers, real estate developers and civic groups, both regionally and nationally.

Negative Externalities of a Central City’s Tris on Surrounding Suburban Housing Sale Prices: are Economically Distressed Cities more Damaged?

The purpose of this study is to measure negative externalities of toxics release inventories (TRIs) on housing sale prices. This study focuses on TRIs located in the center of Cleveland, Ohio, and their effects on the sale prices of single family homes in surrounding cities in Cuyahoga County, Ohio, from 2001 to 2006. Furthermore, I test whether housing sale prices in economically distressed suburbs have been more harmed by TRIs than those in less distressed suburbs. General OLS regression models that employ hedonic models are used for these estimations. Results of this study suggest that housing sale prices in economically distressed inner-ring suburbs were considerably harmed by Cleveland’s TRIs, while housing sale prices in less distressed inner-ring suburbs were not affected by such TRIs.

Impact of the real median price of single-family homes on US internal net migration: an exploratory empirical note

This exploratory study investigates the impact of the real median price of single-family homes on US net internal migration flows over the 2000 to 2004 period. After allowing for factors such as the growth rate of GSP, the presence of hazardous waste sites, climate, the presence of state income taxes, and other factors, it is found that the rate of net state in-migration over the 2000 to 2004 period was negatively and significantly affected by higher real median prices on single-family homes, a finding consistent with the absence of ‘money illusion’.

Spatial Estimation of the Impact of Airport Noise on Residential Housing Prices

Summary The paper applies spatial econometric techniques to measure the impact of airport noise on the price of single-family homes in the Zurich Airport area. We exploit a large database of geo-referenced noise measurements to investigate the reaction of prices to different noise metrics. The particular institutional setting of Zurich Airport, with changing patterns of runways configurations allows to distinguish the impact of noise at different times of the day. The use of neighborhood fixed-effects is compared to the results given by a costlier modelling strategy involving a rich set of location descriptors. The paper documents the impact of airport noise on housing prices. In the base model specification the Noise Discount Index is 0.97% with typical discounts in the range of −2% to −8%. Accounting for the spatiality of the data has little effect on the results.

Genetic Programming Forecasting of Real Estate Prices of Residential Single-Family Homes in Southern California

Use of an artificial intelligence technique, genetic programming (GP), is introduced here to predict real estate residential single-family home prices. GP is a computerized random search technique that can deliver regression-like models. Spatiotemporal model specifications of periodic average neighborhood prices are implemented to predict individual property prices. Average price variations are explained in terms of changes in home attributes, spatial attributes, and temporal economic variables. Quarterly data (2000-2005) from two cities in Southern California are utilized to obtain GP and standard statistical models. The results suggest that forecasts from city neighborhood average price GP equations may have an advantage over forecasts from GLS equations and over forecasts from models estimated using city aggregated data.

Forecasting prices of single family homes using GIS-defined neighborhoods

We estimate spatiotemporal models of average neighborhood single family home prices to use in predicting individual property prices. Average home-price variations are explained in terms of changes in average neighborhood house attributes, spatial attributes, and temporal economic variables. Models adopting three different definitions of neighborhoods are estimated with quarterly cross-sectional data over the period 2000–2004 from four cities in Southern California. Heteroscedasticity and autocorrelation problems are detected and adjusted for via a sequential routine. Results of these models suggest that forecasts obtained using city neighborhood average price equations may have advantage over forecasts obtained using city aggregated price equations.

Spatial Estimation of the Impact of Airport Noise on Residential Housing Prices

The paper applies spatial econometric techniques to measure the impact of airport noise on the price of single-family homes in the Zurich Airport area. A hedonic model is specified with an error component accounting for spatial dependence. The paper takes a differentiated approach on the modelling of aircraft noise. We exploit a large database of geo-referenced noise measurements to investigate the reaction of prices to different noise metrics. The peculiar institutional setting of Zurich Airport, with changing patterns of runways configurations allows to distinguish the impact of noise at different times of the day. The use of neighborhood fixed-effects is compared to the results given by a costlier modelling strategy involving a rich set of GIS-based location descriptors. The paper documents a moderate impact of airport noise on housing prices. In the base model specification the Noise Discount Index is 0.93% with typical discounts in the range of -2% to -8%. Accounting for the spatiality of the data has little effect on the estimated coefficients and their standard errors.

Impact of the Real Median Price of Single-Family Homes on Geographic Mobility, 2000-2005

The present study investigates the impact of the real median price of single-family homes on net internal migration flows in the United States over the 2000-2005 period. After allowing for factors such as the growth rate of GSP, the presence of hazardous waste sites, climate, per capita state income taxes, and other factors, it is found that the net state inflow of migrants over the 2000-2005 period was negatively and significantly affected by higher real median prices on single-family homes, a finding consistent with the absence of ‘‘money illusion’’ in the migration decision.