Patterns and Determinants of Metropolitan House Prices, 1977-91

39 Pages Posted: 28 Jan 2006 Last revised: 21 May 2007

See all articles by Jesse M. Abraham

Jesse M. Abraham

National Bureau of Economic Research (NBER)

Patric H. Hendershott

University of Aberdeen - Centre for Property Research; National Bureau of Economic Research (NBER)

Date Written: October 1992

Abstract

Real metropolitan house prices have been quite volatile during the 1977-91 period, with half of our 30 areas having annual increases of above 15 percent in a single year and a third having decreases greater than 7.5 percent. Drawing on Capozza and Helsley's models of real land prices, we express real house price changes as a function of the rate of change in employment, real income growth, real construction cost inflation, and changes in real after-tax interest rates. Our explanatory power varies widely by region. We do quite well for the half of our cities in the more stable Upper Midwest and Southeast, less well for the coastal cities, and dismally for the two Texas cities.

Suggested Citation

Abraham, Jesse M. and Hendershott, Patric H., Patterns and Determinants of Metropolitan House Prices, 1977-91 (October 1992). NBER Working Paper No. w4196, Available at SSRN: https://ssrn.com/abstract=879241

Jesse M. Abraham

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Patric H. Hendershott (Contact Author)

University of Aberdeen - Centre for Property Research ( email )

Aberdeen AB24 2UF
Scotland

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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