The Housing Market(s) of San Diego

This paper uses an assignment model to understand the cross section of house prices within a metro area. Movers' demand for housing is derived from a life-cycle problem with credit market frictions. Equilibrium house prices adjust to assign houses that differ by quality to movers who differ by...

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Bibliographic Details
Published in:The American economic review Vol. 105; no. 4; pp. 1371 - 1407
Main Authors: Landvoigt, Tim, Piazzesi, Monika, Schneider, Martin
Format: Journal Article
Language:English
Published: Nashville American Economic Association 01.04.2015
American Economic Assoc
Subjects:
Age differences
Bond markets
California
Capital gains
Cash
Census tracts
Consumer credit
Consumer Price Index
Cost control
Credit
Credit market
Distribution
Down payments
Economic models
Equilibrium
Households
Houses
Housing
Housing conditions
Housing demand
Housing market
Housing needs
Housing prices
Life cycles
Low income groups
Market prices
Metropolitan areas
Price functions
Prices
Regression analysis
Sales
San Diego (Calif.)
U.S.A
Wealth
United States > US
San Diego County California
ISSN:0002-8282, 1944-7981
Online Access:Get full text
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Summary:This paper uses an assignment model to understand the cross section of house prices within a metro area. Movers' demand for housing is derived from a life-cycle problem with credit market frictions. Equilibrium house prices adjust to assign houses that differ by quality to movers who differ by age, income, and wealth. To quantify the model, we measure distributions of house prices, house qualities, and mover characteristics from micro-data on San Diego County during the 2000s boom. The main result is that cheaper credit for poor households was a major driver of prices, especially at the low end of the market.
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ISSN:0002-8282
1944-7981
DOI:10.1257/aer.20111662