Real Estate Prices During the Roaring Twenties and the Great Depression
Harvard University - Entrepreneurial Management Unit
University of California, Davis - Graduate School of Management
March 21, 2011
UC Davis Graduate School of Management Research Paper No. 18-09
Using new data on market-based transactions we construct real estate price indexes for Manhattan between 1920 and 1939. During the 1920s prices reached their highest level in the third quarter of 1929 before falling by 67 percent at the end of 1932 and hovering around that value for most of the Great Depression. The value of high-end properties strongly co-moved with the stock market between 1929 and 1932. A typical property bought in 1920 would have retained only 56 percent of its initial value in nominal terms two decades later. An investment in the stock market index (including dividends) would have outperformed an investment in a typical property (including net rental income), by a factor of 5.2 over our time period.
Number of Pages in PDF File: 44
Keywords: Real Estate, Price Index, Great Depression
JEL Classification: E32, G01, N12, N92, L85
Date posted: September 8, 2009 ; Last revised: March 24, 2011
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