Flattening the Curve: Pandemic-Induced Revaluation of Urban Real Estate

62 Pages Posted: 8 Feb 2021 Last revised: 5 May 2021

See all articles by Arpit Gupta

Arpit Gupta

NYU Stern School of Business

Vrinda Mittal

Columbia Business School, Columbia University in the City of New York

Jonas Peeters

New York University (NYU) - Center for Data Science

Stijn Van Nieuwerburgh

Columbia University Graduate School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); ABFER

Multiple version iconThere are 2 versions of this paper

Date Written: February 26, 2021

Abstract

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 that urban rent growth will exceed suburban rent growth for the foreseeable future.

Keywords: COVID-19, land values, bid-rent function

JEL Classification: R23, R51, R12

Suggested Citation

Gupta, Arpit and Mittal, Vrinda and Peeters, Jonas and Van Nieuwerburgh, Stijn, Flattening the Curve: Pandemic-Induced Revaluation of Urban Real Estate (February 26, 2021). NYU Stern School of Business Forthcoming, Columbia Business School Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=3780012 or http://dx.doi.org/10.2139/ssrn.3780012

Arpit Gupta

NYU Stern School of Business ( email )

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HOME PAGE: http://arpitgupta.info

Vrinda Mittal

Columbia Business School, Columbia University in the City of New York ( email )

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HOME PAGE: http://www.vrindamittal.com

Jonas Peeters

New York University (NYU) - Center for Data Science ( email )

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Stijn Van Nieuwerburgh (Contact Author)

Columbia University Graduate School of Business ( email )

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Centre for Economic Policy Research (CEPR)

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