Residential Property Values Research Articles

Customizing a mass appraisal model for residential property tax assessment: a hedonic regression approach in Bahir Dar city, Ethiopia

PurposeThe paper aims to estimate the house rental values for the purpose of customizing mass appraisals in Bahir Dar City, Ethiopia. It seeks to identify the critical factors affecting the rental values of residential properties and customize a mass appraisal model for such properties. The study focuses on identifying attributes that significantly affect house rental values.Design/methodology/approachThe paper adopted a survey research design, utilizing a survey questionnaire, expert group discussion and document analysis. The data were analyzed using thematic, descriptive and inferential statistical analysis, including correlation and hedonic regression analysis.FindingsAmong the variables included in the model, the number of rooms, availability of schools, land value grading, type of nearest road, housing typology, built-up area, plot area, walling material, traveling cost and fencing materials were the most significant factors for predicting the annual rental value of residential properties in the city.Research limitations/implicationsThe findings of this study will provide valuable insights to tax assessors, property owners and local government authorities, including municipalities, concerning the key determinants of the rental values of residential properties. Besides, these findings will serve as a useful tool for valuers and researchers in the field of property value modeling.Originality/valueThis study represents the first attempt to develop a framework for mass appraisal of residential properties using annual rental values in the Ethiopian context.

What is the “best” way to measure the relative location variables in the market value assessment? An econometric method applied to an Italian case study

The present research is dedicated to investigating the explanatory power of relative location variables in assessing and forecasting market values. Here, relative location refers to the spatial position (geographical context) of a building or property in relation to a given Point Of Interest (POI). Specifically, a methodological approach is proposed for identifying the most suitable quantification modality based on statistical performance and consistency with the market mechanisms of the specific reference context. For a case study in Northern Italy, we collected data on 615 residential properties and 2673 POIs, including cultural facilities, school and education institutions, commercial services, sports, entertainment, and leisure facilities, health and care services, public transport systems, urban parks, and green areas. The relative location between the collected properties and the POIs is assessed using an automated calculation procedure developed in the Python programming language, in conjunction with Geographic Information Software (GIS). This automatism allows the assessment of relative location in terms of different Units Of Measure (UOM), such as straight-line distance, travel time by car, travel time on foot, travel time by public transport, and the number of POIs in a 400 m/1 km ring buffer. Since 615 residential buildings and 2673 POIs were analysed, with their relative locations measured using six different UOMs, a database of 9'865'215 data was produced. Furthermore, for each category of POI, a feature importance analysis guides the selection of the best UOM, i.e., the most statistically significant one. Considering the chosen UOM, an optimised econometric technique is finally implemented to analyse the functional relationships between the market values of residential properties and the set of identified relative location variables.

Cognitive limits of perceived flood risk on residential property values

Examining cognitive limits in flood risk perception for residential property values, we analyse the Richmond housing market in the state of New South Wales, Australia. Using micro-level home sales data, our study reveals that the market has integrated long-term flood risk into property values. A notable 10.8 % price discount is observed for properties within 1–100 Annual Exceedance Probability (AEP) flood zone, 4.4 % for those in an AEP 500 zone, with no discounts for AEP 1000 flood zone properties. Comparisons of 2019 and 2023 flood maps and property's Time-on-Market (TOM) affirm that people's cognitive limits constrain to the AEP 500 level.

Comparative Statistical Analysis of Changes in Average Asking Prices for Housing in the Administrative Districts of Moscow

The article presents the results of a comparative analysis of the residential real estate market in nine administrative districts of Moscow in 2016 and 2024. The paper focuses on the features of housing price formation and considers factors influencing pricing, including socio-economic conditions and transport infrastructure. The study outlines the role of housing construction and the investment attractiveness of various districts of the capital.The authors used official data from Russia's largest real estate technology service (CIAN) on asking prices for apartments for sale depending on their parameters. The article draws on such indicators as the local average price per square meter of the total area of dwellings and the number of offers of apartments for sale. It is shown that apartment prices in two administrative districts (AO) of Moscow have a stable growth trend in 2024, which was not observed in 2016. It is concluded that the real estate markets in the districts of Moscow in 2016 (exception for the Central AO) were strongly differentiated in price offers in 2024, and, therefore, it is incorrect to use the average price per square meter of Moscow residential real estate as a characteristic of housing quality in 2024.The article lists events that influenced changes in the Moscow residential real estate market without specifying the relative strength of their impact. According to the authors, each event had its causes, but their almost simultaneous appearance led to tension in the housing market for all participants.In conclusion, the significant impact of inflation and the restoration of residential premises (after renting) on the growth of residential property values and the potential for using housing as an investment object is emphasized

Economic impact of large earthquakes: lessons from residential property values

Abstract Understanding how economic agents respond to seismic shocks in a developing country setting is crucial to evaluating the economic costs of natural disasters. This article makes use of the quasi-random spatial and temporal nature of ground tremors to estimate the economic impact of the April 2015 earthquake on residential property values in Nepal. Regression estimates from the difference-in-differences research design show that residential property values declined by about 40.52 percentage points in areas with high seismic intensity. The event study model illustrates that these negative economic effects are more pronounced between 12 and 24 months after the incidence of the earthquake. Findings further underscore the underlying mechanism of physical damage and indicate that residential properties with weaker outer walls, foundations and roof materials became more susceptible to the earthquake.

A Double Negative: Capitalizing on Assessment Regressivity

We estimate the degree to which tax inequity generated through property tax assessment practices are capitalized into residential property values. Our analysis not only evaluates whether property buyers understand the tax obligations they are likely to face at the purchase of their property, we also document varying effects based on assessment status. Overassessed, lower-valued property sell for a discount and underassessed, higher-valued property sell for a premium. Specifically, overassessed property sells for an undercapitalized discount of 13%, while underassessed property sells for overcapitalized premiums equal more than 10%. Together, our results imply assessment practices impact wealth both during and after property ownership, potentially widening the wealth gap between high- and low-income homeowners.

Dissolving Districts: Did Property Values Fall When California Terminated Its Redevelopment Agencies?

California pioneered the use of tax increment finance (TIF) to promote redevelopment, but in 2012 all redevelopment agencies in the state were simultaneously (and unexpectedly) dissolved, essentially eliminating TIF-supported redevelopment in California. This paper uses hedonic methods to analyze changes in residential property values associated with the dissolution of TIF districts in five cities in northern Orange County. If TIF is necessary for (re)development in the TIF districts, then the unexpected elimination of TIF-funded redevelopment should have reduced property values. The authors find that, within the study area, the elimination of TIF was not associated with decreases in residential values within TIF districts, and quality-adjusted home prices in and near former TIF districts continued to grow at a rate at least comparable to citywide rates in the aftermath of the dissolution. These findings raise the concern that TIF may function as a tool for revenue capture before the TIF districts reach the anticipated expiration dates. In the absence of significant regulatory safeguards, TIF may be used to capture revenue from overlapping governments, instead of serving as an engine of economic development.

Do 5G cell phone towers decrease house prices? Evidence from Warsaw

AbstractThis study investigates the impact of telecommunication infrastructure on residential property prices in Poland. This study contributes to the discussion of economic externalities related to new public infrastructure within the urban landscape. We use hedonic regression, matching techniques, and a difference-in-differences estimator to assess the impact of base transceiver stations on apartment prices in Warsaw, the capital of Poland, which covered market data on the sales of residential premises located in Miasteczko Wilanów estate in Warsaw from 2016 to 2021. In the analysed period, 1,825 residential sales were recorded and used for econometric modelling. The results do not confirm the influence of the vicinity of the wireless communication technology infrastructure on residential real estate prices in the studied local market. In particular, we did not observe a detrimental effect of cell phone towers on housing prices. Additionally, we investigate whether residential sale prices in proximity to BTS changed significantly after the introduction of the 5G standard. This particular issue has not been addressed in the economic literature. We found that the sale prices of apartments located in Warsaw were not statistically affected by the introduction of a fifth-generation technology standard for broadband cellular networks. Our research contributes to a better understanding of stigmatisation effects related to telecommunication infrastructure, and in particular, the links between the presence of cell phone towers and residential property values in the neighbourhood. The results may be of interest to all potential agents involved in neighbourhood conflicts arising from investments in cell phone towers and the development of new communication infrastructure in urban landscapes.

Effect of Micro Economic Factors on Residential Property Value in Birnin Kebbi, Kebbi State, Nigeria

The research aims to assess the microeconomic factors affecting residential property values in Birnin Kebbi. Property serves as an asset for any individual, as real estate is one of life's primary goals. Besides the need to eat and drink, property also plays a crucial role in daily life. Property values are influenced by various factors, which can be either microeconomic or macroeconomic in nature, or both. Many microeconomic variables are related to property attributes and buyer demographic profiles. To achieve this aim, two objectives were formulated: (i) to examine the types of property and microeconomic factors affecting property values in the study area, and (ii) to assess the effect of microeconomic factors on residential property values. Both primary and secondary sources of data were used for data collection. Out of 377 questionnaires administered, 321 were retrieved. Simple random sampling and stratified random sampling methods were employed. Quantitative methods were used for data analysis, and all data gathered were analysed using descriptive statistics and the Likert scale. The study found that physical characteristics of residential properties, such as types of materials used, building design, room sizes, parking spaces, building age, and landscape, significantly influence property values. Additionally, the types of finishes (roofs, walls, ceilings, and floors), infrastructural facilities, and social amenities (number of toilets, electricity fittings, waste disposal and sewage, potable water supply, and various sanitation facilities) also play a role. The effects of microeconomic variables on property values in the study area include insecurity, increased traffic, property price changes, nuisances, environmental quality, property demand, and time consumption. The study recommends that prospective property developers ensure the use of standard building finishes to maximize returns on their investment in property value. Additionally, the government should introduce policies to ease difficulties in importing housing materials and promote the manufacture of local ones.

Beyond environmental harm: Industry claims, lived experiences, and the impacts of gas extraction

The peer-reviewed literature presents overwhelming evidence that fossil fuel based energy infrastructure projects are responsible for lower residential property values, environmental destruction and pollution that decrease residents' quality of life. These projects also challenge local people's sense of identity and even the threat of such a project can make residents question their sense of place. As evidence, we first present a bibliographic analysis of the environmental impact statements for the Mountain Valley Pipeline in West Virginia and the Jordan Cove Energy Project in Oregon. We find that their approval processes relies on non-peer-reviewed, industry-funded claims that pipelines will bring economic benefit and will have no effect on property values. Second, through original interview data gathered between 2019 and 2021 in West Virginia and in 2021 in Oregon, we engage with the concepts of sense of identity and sense of place to demonstrate that regardless of the local context, fossil fuel based energy infrastructure projects cause more than environmental damage; they trigger emotional reactions in residents that see or fear seeing their everyday lives upended. Taken together, this Perspective contributes to the emerging field of emotional energy geography to show how the plans and implementation of oil and gas pipelines become crucial turning points in residents' lives.

Impact of proximity to cell phone tower base stations on residential property prices in the City of Johannesburg, South Africa

Purpose With revolutions in the telecommunication sector having led to wide unprecedented consequences in all facets of human life, this paper aims to examine the relationship between cell phone tower base stations (CPTBSs) and residential property prices within the City of Johannesburg (CoJ), South Africa. Design/methodology/approach The authors align their work with global literature and assess how the impact of CPTBSs influences residential property values in South Africa. The authors use a semi-log hedonic pricing model to test the hypothesis that proximity of CPTBSs to residential properties does not account for any variation in residential property prices. Findings The results show a significant impact that proximity of CPTBS has on residential property sale prices. However, the impact of CTPBSs’ proximity on residential property prices depends on their distance from the residential properties. The closer a residential property is to the CTPBS, the greater the impact that the CTPBS will have on the selling price of the residential property. Originality/value With international studies offering mixed findings on the impact of CPTBSs on residential property values, there is limited research on their impact in South Africa. The findings of this study offer crucial insights for the real estate practitioners, property owners, telecommunications companies and the public, providing a nuanced understanding of the relationship between CPTBSs and property values. This research helps property owners understand the effects of CPTBSs on their properties, and it assists property valuers in gauging the impact of CPTBSs on property values.

Remapping California's wildland urban interface: A property-level time-space framework, 2000–2020

Wildland fire poses a significant risk to property and people, and these risks tend to be highest in places where flammable, wildland vegetation abuts urban development. Traditionally, efforts to map these areas of intersection, known as the Wildland Urban Interface (WUI), have relied on satellite-derived land cover and census data. While these types of data are valuable for broadly delineating WUI areas, they are constrained in their ability to specifically identify at-risk residential properties and their characteristics over time. This article addresses these challenges through a multi-time-step, property-level framework that enhances current approaches based on moving window mapping, the Time Step Moving Window (TSMW) framework. We implement this framework on approximately 10 million geo-located property records from Zillow's Transaction and Assessment Database for California. Using this framework, we generate estimates of California's WUI from 2000 to 2020 and find that our time stepped building scale maps have allowed us to classify residential homes at-risk to burns with greater accuracy compared to time stepped Census polygon based maps. Based on these maps, we further estimate that approximately $1.34 Trillion, or 40%, of California's improved residential property value is situated within the WUI. Our approach provides a high-precision strategy for delineating at-risk residences and calculating localized financial costs associated with future hazard events.

Impact of Green Features on Rental Value of Residential Properties: Evidence from South Africa

In recent years, scholars have called for an increase in the usage of green features in the built environment to address climate change issues. Governments across the developed world are implementing legislation to support this increased uptake. However, little is known about how the inclusion of green features influences the rental value of residential properties located in developing countries. Data on 389 residential properties were extracted and collected from a webpage. Text mining and machine learning models were used to evaluate the impact of green features on the rental value of residential properties. The results indicated that floor area, number of bathrooms, and availability of furniture are the top three attributes affecting the rental value of residential properties. The random forest model generated better predictions when compared with other modelling techniques. It was also observed that green features are not the most common words mentioned in rental adverts for residential properties. The results suggest that green features add limited value to residential properties in South Africa. This finding suggests that there is a need for stakeholders to create and implement policies targeted at incentivising the inclusion of green features in existing and new residential properties in South Africa.

Flattening which curve? Property-price gradients in New South Wales during the COVID-19 pandemic

ABSTRACT This paper tests how the patterns of residential property values in the Australian state New South Wales changed during the COVID-19 pandemic. Between 2019 and 2021, property values became relatively high in medium-sized towns and cities, suggesting those locations became more attractive. In its capital and largest city Sydney, the premium on proximity to the central business district (CBD), where employment is heavily concentrated, decreased after 2019 and that decrease persisted beyond the end of pandemic measures. The premium in Sydney on proximity to the beach has increased, but on a trajectory consistent with an existing trend. The decreased premium on proximity to the CBD since 2019 appears to have initially been related to the value of access via public transport, but then also to the value of access by car. The findings suggest shifts in regional development and urban form that could have implications for how cities are planned and developed.

Willingness to pay for flood risk mitigation among residents living near river’s confluence in Yogyakarta, Indonesia

Both property buyers and owners are concerned about the impact of flooding on residential property price. Although several studies have investigated the possibility of property devaluation in flood-prone areas, there are still few that have looked into the effects of flooding on residential properties in Sriharjo, Imogiri, Indonesia. This study aims to examined housing characteristics such as structure, neighborhood, and environment on residential property value. We also created an interaction variable between flood and structural attributes to see whether the impact of flood inundation on property value varies depending on the age of the building, the size of the building area, and the number of bedrooms. Using the hedonic pricing model, we found that flooding reduces the market value of residential property value. The characteristics of property like land square, building square, building age, and number of rooms have influence on property price. The characteristics of neighborhoods are also influence to property price such as distance to city, distance to main road, distance to school and distance to the river. Only one environmental characteristic which influence to property price is height of flood inundation. We discovered that, on average, a rise in the amount of flood inundation decreased property prices in the research region by.015% by using a two-stage estimating approach to evaluate these associations. We calculated IDR 698,500 as the marginal implicit cost of reducing flood inundation. According to subsequent estimates, homeowners would be ready to pay an extra 0.685 percent for a decrease in flood inundation. The study’s findings will help property owners better understand the elements that contribute to property depreciation due to floods. This paper also suggests flood insurance plans since flooding is a significant issue for real estate owners.

Exploring the Impact of Multimodal Access on Property and Land Economies in Shanghai’s Inner Ring Districts: Leveraging Advanced Spatial Analysis Techniques

This study explores the impact of accessibility on property pricing and land economies by advanced spatial analysis techniques, focusing on Shanghai as a representative metropolis. Despite the impact of metro systems on residential property values, which has been frequently assessed, a research gap exists in understanding this phenomenon in Asian, particularly Chinese, urban contexts. Addressing this gap is crucial for shaping effective urban land use policy and improving the land economy rationally in China and similar settings facing urban challenges. To assess the impact of metro station accessibility on property prices in Shanghai, with extensive rail transit, and to deeply explore the overall impact of land value varieties driven by metro on urban development, we conducted a comprehensive analysis, with discussion about future aspirations for land planning and management along with landscape and facility design, and measures to improve land economy. The procedures involved creating neighborhood centroids to represent accessibility and using the Euclidean distance analysis to determine the shortest paths to metro stations. Our evaluation incorporated a hedonic pricing model, considering variables like neighborhood characteristics, housing attributes, and socio-economic factors. Advanced spatial analysis encompassing Ordinary Least Squares (OLS) regression and XGBoost analysis were employed to explore spatial effects, and Geographically Weighted Regression (GWR) helped examine spatial patterns and address autocorrelation challenges. Results revealed a negative association between distance to metro station and property prices, indicating a non-linear and spatially clustered relationship and heterogeneous spatial pattern. We dissected the non-linear results in detail, which complemented the conclusion in existing research. This study provides valuable insights into the dynamic interplay between metro accessibility and housing market behaviors in a significant Asian urban context, offering targeted suggestions for urban planners and governors to decide on more reasonable land use planning and management strategies, along with landscape and infrastructure design, to promote not only the healthy growth of the real estate market but also the sustainable urban development in China and similar regions.

Craft breweries and residential property values

AbstractThis paper studies the effect of craft breweries on residential property values. Using a hedonic Difference‐in‐Differences (DID) approach and about 250 thousand housing transactions in Denver, Colorado from 1990 to 2016, we investigate the impact of proximity to a craft brewery on residential property values. We consider three types of residence (single‐family home, row house, and condominiums), three types of brewery (all craft breweries, microbreweries, and brewpubs/taprooms), and two measurements of distance (Euclidian and walk‐time). Our most robust results are found for single‐family homes, whose values enjoy a premium of up to 20.4% for being in proximity to a brewpub/taproom several years after, with the average annual maximum premium around 3%. As expected, premiums decline as distance from breweries increase. Beyond a distance of 0.5 km or a 10‐min walk‐time, the premium for a regional/microbrewery is greater than that for a brewpub/taproom. For single family homes within 4 km or 40‐min walk‐time, the annualized premium ranges between 0.41% and 3.01%. These findings support the narrative that craft breweries are a neighborhood asset.

Are local retail services an amenity or a nuisance?

Abstract We test whether local retail services are considered a nuisance or an amenity and how this distinction is capitalized into residential property values. Using a rich, micro-spatial dataset on property sales transactions and business activity in New York City, we estimate the impact of access to neighborhood retail services on residential sales prices. We construct two instruments to channel supply-side drivers of retail change and to address concerns of endogeneity between changes in retail activity and property values. Results show that retail services that are more frequently consumed and experiential, and are located in relatively more mixed-use neighborhoods are positively capitalized into property values. Residents also pay more to be closer to more diverse retail clusters, and relatively less to be closer to chains. This is true across smaller 1-to-4 family homes as well as larger condos/coops and multi-family rental buildings. The price effects from certain classifications of retail, like restaurants and personal services, are mixed depending on the kind of residential property and the local concentration of the retail. Therefore, the relative strength of the amenity or nuisance effect is very much conditioned on the type of service and the localized neighborhood context.

Hurricane Sandy’s impact on the Borough of Mantoloking, NJ, October 2012

Hurricane Sandy hit Mantoloking, New Jersey, 29 October 2012, heavily damaging both residential and municipal infrastructure located on a barrier spit extending south from Manasquan Inlet in Ocean County, NJ. Due to the storm, residential property values dropped by $528.3 million and more than $5 million in recovery expenses were incurred by the borough. The Herbert Avenue inlet breach severed all infrastructure and critical services to the rest of the peninsula with the Federal Highway Administration, the New Jersey Department of Environmental Protection (NJDEP) and the New Jersey Department of Transportation (NJDOT) bearing $265 million to restore State Highway 35, including $23.8 million to install a vertical steel bulkhead along 3.5 miles of oceanfront shoreline. In addition, individual oceanfront residential owners living north of Lyman Street spent between $48,000 and $72,000 each on a rock revetment linking the steel wall with a pre-existing rock revetment which ended in Bay Head, the neighboring community to the north. The oceanfront owners formed an alliance allowing them to contract as a group for this project. Finally, the U.S. Army Corps of Engineers, Philadelphia District, entered into an agreement with the State of New Jersey to construct a dune 14 miles long and 22 feet high (NAVD 88) with between a 75- and 220-foot-wide berm seaward of that dune between Seaside Park in the south and Point Pleasant Beach just north of Bay Head. This project was completed in Mantoloking in 2019 with an initial construction cost of $122.05 million. This project’s commitment is for 50 years after the Corps and New Jersey signed the state aid agreement extending into 2065.

Understanding the impact of city government relocation on local residential property prices in Hangzhou, China

Public sector relocation represents a widely adopted place-based policy by national and local governments globally, serving a range of objectives such as promoting regional balance development and stimulating local growth. At the city level, local governments often anticipate substantial economic growth in the vicinity of the new government site, leading to an increase in residential property values. The new government site not only acts as a catalyst for economic activities, employment, and the concentration of amenities but also directly influences residential property transaction prices due to its impact on the market perception. This study aims to analyze the influence of government relocation on the prices of surrounding residential properties in Hangzhou, China. Hangzhou relocated its city hall from the old city center to a new central business district near the Qiantang River between 2015 and 2016. To understand the patterns of impact on residential property prices across time and space, we employ a combination of the hedonic pricing method, the difference-in-difference approach, and dynamic effect capturing techniques. Concurrent policies and amenities are considered to isolate the specific effect of government relocation. The findings reveal spatially concentrated and temporally transient positive effects. The average treatment effect over the seven-year post-relocation period was positive (4.76%), though it did not reach statistical significance. Particularly noteworthy was the significantly positive effect (12.7%) on transaction prices within a 5 km radius of the new city hall during the first year following relocation; however, this effect diminished rapidly in subsequent years. For transactions within 1 km of the new government site, the significant positive effect persisted for five years. These findings suggest that the arrival of a major public sector entity has limited direct effects on promoting the residential property market. Furthermore, the study highlights the concentrated nature of spillover effects associated with place-based programs, indicating that the positive effects are specific to certain spatial and temporal dimensions.