House prices and land prices under the microscope: a property-level analysis for the Washington, DC area

Abstract:

In this paper, we use a new property-level dataset to estimate the price of land since 2000 for nearly 600,000 detached single-family homes in the Washington, DC metro area. We employ these estimates to characterize the recent boom/bust cycle in land prices and house prices in the Washington area at a fine level of geography. The data show that land prices were more volatile than house prices everywhere, but especially so in the areas where land was inexpensive in 2000. In those areas, the land share of property value jumped during the boom, and this rise in the land share was a useful predictor of the subsequent crash in house prices. These results highlight the value of focusing on land for assessing house-price risk. In ongoing work, we are exploring how much of the spatial variation in land-price changes can be linked to high-risk mortgage lending and fundamentals such as housing rents, income growth, and employment.

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About the Author

 

Edward J.
Pinto

 

Stephen D.
Oliner

 

Morris A.
Davis

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Tuesday, September 16, 2014 | 5:00 p.m. – 6:00 p.m.
The Constitution as political theory

Please join us for the third-annual Walter Berns Constitution Day Lecture as James Ceasar, Harry F. Byrd Professor of Politics at the University of Virginia, explores some of the Constitution’s most significant contributions to political theory, focusing on themes that have been largely unexamined in current scholarship.

Wednesday, September 17, 2014 | 8:10 a.m. – Thursday, September 18, 2014 | 1:30 p.m.
Third international conference on housing risk: New risk measures and their applications

We invite you to join us for this year’s international conference on housing risk — cosponsored by the Collateral Risk Network and AEI International Center on Housing Risk — which will focus on new mortgage and collateral risk measures and their applications.

Thursday, September 18, 2014 | 2:15 p.m. – 3:00 p.m.
Speaker of the House John Boehner on resetting America’s economic foundation

Please join us as Speaker John Boehner (R-OH) delivers his five-point policy vision to reset America’s economy.

Friday, September 19, 2014 | 9:15 a.m. – 11:00 a.m.
Reforming Medicare: What does the public think?

Please join us as a panel of distinguished experts explore the implications of the report and the consumer role in shaping the future of Medicare.

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