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Flattening the Curve and the Flight of the Rich: Pandemic-Induced Shifts in US and European Housing Markets
Author:
Nina Biljanovska
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Giovanni Dell'Ariccia
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Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 266
Language:
English
Publication Date:
22 Dec 2023
DOI:
https://doi.org/10.5089/9798400262449.001
ISBN:
9798400262449
ISSN:
1018-5941
Pages:
47
Keywords:
Property prices; House price gradient; City structure; High-income population mobility; population mobility; price gradient; housing unit; income gap; Housing prices; Income; Real estate prices; Inflation; Europe
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The pattern of increasing suburban house prices relative to urban centers initiated during the pandemic continues to hold across the top 30 US metropolitan statistical areas (MSAs). In contrast, European countries such as Denmark, France, and the United Kingdom did not experience a similar shift in valuations. We posit and find supporting evidence that these divergent patterns partially due to differences in the characteristics of suburban areas, particularly in terms of household income and property sizes; with European suburbs being relatively poorer and characterized by smaller housing units. We show that, in the US, MSAs with suburban features more akin to those in European cities generally experienced little to no increase in suburban housing prices compared to their urban centers. Finally, our findings indicate that migration patterns of the high-income population might have partially influenced the urban-suburban revaluation in the US.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund