The Geography of Housing Market Liquidity During the Great Recession

101 Pages Posted: 29 Apr 2020

Date Written: 2020

Abstract

Using detailed micro data at the ZIP code level, this article explores the regional variation in housing market performance to account for the severity of the Great Recession. The granularity of the data, relative to a more traditional analysis at the county level, is useful for evaluating the performance of the housing market because credit and local macroeconomic variables are tied to housing valuations. The deterioration of the ability to transact (buy and sell) housing units, often referred to as housing liquidity, is an important link that connects housing outcomes with real and credit variables. The data indicate that the timing, severity, and duration of the recession varied across regions and was closely connected with the behavior of the housing market. The deterioration in housing liquidity was uniform across all house price tiers (i.e., bottom, middle, and upper end). Furthermore, there was correlation across areas between the magnitude of the declines in housing liquidity and the severity of the deterioration in house prices and macroeconomic conditions.

JEL Classification: E22, D83, G11, E21, D31, G21, G12

Suggested Citation

Famiglietti, Matthew and Hedlund, Aaron, The Geography of Housing Market Liquidity During the Great Recession (2020). Available at SSRN: https://ssrn.com/abstract=3587686 or http://dx.doi.org/10.20955/r.102.51-77

Aaron Hedlund

University of Missouri ( email )

118 Professional Building
Columbia, MO 65211
United States

HOME PAGE: http://www.aaronhedlund.com

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