Local House Price Diffusion
34 Pages Posted: 18 Sep 2020
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Local House Price Diffusion
Date Written: Autumn (Fall) 2020
Abstract
We contribute to the literature on house price diffusion by carrying out our analysis at three levels: CBSA (nationwide), town and census tract (Greater Boston Area). We estimate fixed‐effect models of house price growth on lagged growth (“Persistence”), nearby lagged growth (“Spillovers”) and Fundamentals growth. CBSA‐level Persistence and Spillover Effects are positive and significant. These large ripple/contagion effects likely contributed to the recent national‐level housing downturn. We find evidence of smaller town‐level Persistence and Spillover Effects. Hence, diffusion appears stronger across than within housing markets. Fundamentals and price expectations drive price diffusion, leaving room for bubbles from future price overoptimism.
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Jeffrey Cohen (Contact Author)
University of Connecticut - School of Business ( email )
368 Fairfield Road
Storrs, CT 06269-2041
United States
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Local House Price Diffusion
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