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Second‐home buying and the housing boom and bust

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  • Daniel I. García

Abstract

I estimate the effects of second‐home buying (existing homeowners acquiring additional properties) on the housing boom and bust, by constructing a new measure and using a new identification strategy based on the rise in out‐of‐town demand for second homes in vacation areas during the housing boom. Areas with plausibly exogenous higher second‐home buying experienced a sharper boom and bust: faster growth in house prices and construction employment from 2000 to 2006, and a sharper contraction from 2006 to 2010. The results suggest that changes in credit demand were important in amplifying the recent housing cycle.

Suggested Citation

  • Daniel I. García, 2022. "Second‐home buying and the housing boom and bust," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(1), pages 33-58, March.
    • Handle: RePEc:bla:reesec:v:50:y:2022:i:1:p:33-58
    DOI: 10.1111/1540-6229.12343
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