Understanding spatial house price dynamics in a housing boom

  • We examine the evolution of spatial house price dispersion during Germany's recent housing boom. Using a dataset of sales listings, we find that house price dispersion has significantly increased, which is driven entirely by rising price variation across postal codes. We show that both price divergence across labor market regions and widening spatial price variation within these regions are important factors for this trend. We propose and estimate a directed search model of the housing market to understand the driving forces of rising spatial price dispersion, highlighting the role of housing supply, housing demand and frictions in the matching process between buyers and sellers. While both shifts in housing supply and housing demand matter for overall price increases and for regional divergence, we find that variation in housing demand is the primary factor contributing to the widening spatial dispersion within labor market regions.

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Author:Leo KaasGND, Georg Kocharkov, Nicolas SyrichasGND
URN:urn:nbn:de:hebis:30:3-715887
URL:https://ssrn.com/abstract=4946328
DOI:https://doi.org/10.2139/ssrn.4946328
Series (Serial Number):SAFE working paper (425)
Publisher:SAFE
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2024
Year of first Publication:2024
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2024/09/17
Tag:House price dispersion; Search frictions in housing markets; Spatial housing markets
Edition:August 7, 2024
Page Number:51
Note:
Funding:  SAFE ; project 21529
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF)
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
JEL-Classification:D Microeconomics / D8 Information, Knowledge, and Uncertainty / D83 Search; Learning; Information and Knowledge; Communication; Belief
R Urban, Rural, and Regional Economics / R2 Household Analysis / R21 Housing Demand
R Urban, Rural, and Regional Economics / R3 Production Analysis and Firm Location / R31 Housing Supply and Markets
Sammlungen:Universitätspublikationen
Licence (German):License LogoDeutsches Urheberrecht