Real Estate Prices During the Roaring Twenties and the Great Depression

32 Pages Posted: 18 Jun 2013

See all articles by Tom Nicholas

Tom Nicholas

Harvard University - Entrepreneurial Management Unit

Anna Scherbina

Brandeis University

Multiple version iconThere are 2 versions of this paper

Date Written: Summer 2013

Abstract

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% 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% 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.

Suggested Citation

Nicholas, Tom and Scherbina, Anna D., Real Estate Prices During the Roaring Twenties and the Great Depression (Summer 2013). Real Estate Economics, Vol. 41, Issue 2, pp. 278-309, 2013. Available at SSRN: https://ssrn.com/abstract=2281004 or http://dx.doi.org/10.1111/j.1540-6229.2012.00346.x

Tom Nicholas (Contact Author)

Harvard University - Entrepreneurial Management Unit ( email )

Cambridge, MA 02163
United States

Anna D. Scherbina

Brandeis University ( email )

415 South Street
Waltham, MA 02453
United States

HOME PAGE: http://sites.google.com/a/brandeis.edu/anna-scherbina/

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