The Push of Big City Prices and the Pull of Small Town Amenities

Abstract

As house prices rise in large, supply-constrained cities, what are the implications for other places that have room to grow? We explore how location amenities have differentially driven population and price dynamics in big cities versus other areas. We provide theory and evidence that demand for high-amenity locations has increased. High-amenity counties in large metropolitan areas have experienced price increases, while high-amenity counties in small metros and rural areas have absorbed increased demand through population growth. High-income and college-educated workers sort into large and high-amenity places, while retirees and other households detached from local productivity gravitate to high-amenity small towns.

Keywords: housing supply, amenities, population dynamics, domestic migration