Taxes, income distribution, and the real estate cycle: why all houses do not appreciate at the same rate
AbstractChanges in house prices are generally reported on an aggregate basis. This article suggests that within a metropolitan area, high-value and low-value homes appreciate at different rates. Overall, the author’s results indicate that appreciation rates are more volatile for high-priced homes than for less expensive homes around the real estate cycle. ; The different rates of price appreciation are partly explained by changes in the user cost of owning a home. Cyclical factors also play a part. Furthermore, the author found that changes in the prices of lowervalue homes have a contemporaneous effect on high-end home prices, while the opposite is not true. His results suggest that in a house-price boom, first-time homebuyers may be in a better position to buy a lowpriced home than the reported, aggregate price index suggests.
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Bibliographic InfoArticle provided by Federal Reserve Bank of Boston in its journal New England Economic Review.
Volume (Year): (1993)
Issue (Month): May ()
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