Flattening the Curve: Pandemic-Induced Revaluation of Urban Real Estate
80 Pages Posted: 8 Feb 2021 Last revised: 10 Aug 2021
Date Written: August 10, 2021
We show that the COVID-19 pandemic brought house price and rent declines in city centers, and price and rent increases away from the center, thereby flattening the bid-rent curve in most U.S. metropolitan areas. Across MSAs, the flattening of the bid-rent curve is larger when working from home is more prevalent, housing markets are more regulated, and supply is less elastic. Housing markets predict an urban revival with urban rent growth exceeding suburban rent growth for the foreseeable future, as working from home recedes.
Keywords: COVID-19, land values, bid-rent function, working from home
JEL Classification: R23, R51, R12
Suggested Citation: Suggested Citation