Purchasing a home is often the single most important investment an individual makes. Aside from the structural characteristics of the home, a potentially more significant factor in the decision-making process is the location as many newly purchased homes are remodeled or expanded prior to the new homeowners moving in. In this paper, in addition to structural characteristics and proximity to amenities such as the ocean and open spaces, we examine distances to colleges, military bases and the U.S./Mexican border in relation to the value of single-family homes in San Diego County over the years 2000-2023. The County of San Diego is unique in its topography as well as economic diversity. Moreover, the City of San Diego ranks eighth among most populous cities in the United States and while home prices are above the national average, the values are less than other California cities such as those in the Bay Area and San Francisco. San Diego also experiences enviable weather conditions year-round. As such, San Diego is ideal for examining the market value of external factors on the price of a home. The findings suggest evidence of a dis-amenity to military bases and the U.S./Mexican port of entry, whereas the results on the distance to colleges are mixed.
Does buyer ethnicity or cultural background affect what they pay to live in neighborhoods served by higher quality public schools? Utilizing innovative methodologies that infer individuals' ethnicity from their names, this research explores how cultural background influences purchasing decisions in areas served by higher quality public schools. Our findings reveal that while ethnic buyers generally pay less for access to better educational facilities, this trend dissipates when controlling for house and neighborhood selection effects, underscoring the subtle role of ethnicity in real estate dynamics. The matched sample analysis, a robustness check, indicates that the apparent price differences across narrow ethnic categories primarily stem from selection biases rather than direct ethnic preferences. These insights not only challenge traditional assumptions about market behavior but also open new avenues for understanding the complex layers of buyer decision-making in diverse markets.
Over the first two decades of the 21st century, there has been a high correlation between balance of payment measures and housing price indexes. The international finance theory has focused on determining the cause of this relationship. The theory has found that deregulation in credit markets, accommodative US monetary policy, and fixed exchange rate regimes caused US housing prices and balance of payments measures to move together. This has pointed to a group of economies/regions where capital flows would more important in determining housing price returns. In 2015, BEA released new estimates of balance of payments measures in line with international standards, such that now bilateral financial account data have been created. In this study, I use regional aggregate bilateral financial account data to forecast US housing prices. Using out-of-sample forecasting techniques, I find that capital inflows from Latin America are able to produce improved forecasts of greater than 30 percent compared to an autoregressive model.
We investigate the relationship between homeownership and life as well as housing satisfaction. Following several studies, we confirm the positive relationship between housing satisfaction and homeownership using panel data from Germany. Contrary to most of the literature, we find no positive significant effects of a home purchase on life satisfaction in the long-term. Analyzing short-term effects in an event-study design, we show that both life and housing satisfaction anticipate the acquisition and adapt shortly after. Debt-free buyers, however, do not experience anticipation or adaptation effects at all. Comparing outright homebuyers to debt-financing owners, we show that having a real estate loan affects homeowners' life satisfaction negatively. The larger the mortgage burden relative to the household income and the last rent paid, the larger is the negative effect on life satisfaction. We conclude that the mortgage burden of a home purchase can offset the positive effect of homeownership.
Rental markets around the country have recently spiked, causing significant issues in terms of affordability and availability and even prompting talk of nationwide rent controls. The drivers of this recent phenomenon will almost certainly be parsed out in future research. However, there is a critical and pressing need for timely information on recent rent movements in the nation's rental markets and their affordability. This brief provides information (projected rents, degree of over- or underpricing relative to historic trends, year-over-year rent change, and affordability of the average rental unit) for 100 U.S. residential rental markets. A sample of the April 2023 Miami metro market is provided in this brief to deliver guidance on these estimations. Monthly reports are currently provided in the Waller, Weeks and Johnson Rental Index. The goal of the index is to facilitate more informed decision making by consumers, real estate professionals, and policymakers.
