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COVID‐19 and housing market effects: Evidence from U.S. shutdown orders

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  • Walter D'Lima
  • Luis Arturo Lopez
  • Archana Pradhan

Abstract

This paper provides novel evidence on pricing effects in housing markets following government shutdown responses to COVID‐19 using microlevel data on U.S. residential property transactions. We find that post‐shutdown pricing effects not only depend on population density but also the size and structural density of properties. The average price of a three‐bedroom property fell by approximately 1.4% in densely populated locations (e.g., downtown) but increased by about 1.5% in low‐density locations (e.g., suburbs) where shutdowns were enacted. The effects are more drastic for properties with fewer bedrooms. We also document a significant decrease in sales for markets under a shutdown.

Suggested Citation

  • Walter D'Lima & Luis Arturo Lopez & Archana Pradhan, 2022. "COVID‐19 and housing market effects: Evidence from U.S. shutdown orders," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(2), pages 303-339, June.
    • Handle: RePEc:bla:reesec:v:50:y:2022:i:2:p:303-339
    DOI: 10.1111/1540-6229.12368
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    2. Robbennolt, Dale & Haddad, Angela J. & Bhat, Chandra R., 2026. "A rank-based model of residential location preferences before and during the COVID-19 pandemic," Transportation Research Part A: Policy and Practice, Elsevier, vol. 203(C).
    3. Hanif, Waqas & Andraz, Jorge Miguel & Gubareva, Mariya & Teplova, Tamara, 2024. "Are REITS hedge or safe haven against oil price fall?," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1-16.
    4. Xinba Li & Chihwa Kao, 2022. "Spatial Analysis and Modeling of the Housing Value Changes in the U.S. during the COVID-19 Pandemic," JRFM, MDPI, vol. 15(3), pages 1-25, March.
    5. Gilles Duranton & Jessie Handbury, 2023. "COVID and Cities, Thus Far," Economic Policy Review, Federal Reserve Bank of New York, vol. 29(2), pages 6-52, October.
    6. Bossman, Ahmed & Umar, Zaghum & Agyei, Samuel Kwaku & Junior, Peterson Owusu, 2022. "A new ICEEMDAN-based transfer entropy quantifying information flow between real estate and policy uncertainty," Research in Economics, Elsevier, vol. 76(3), pages 189-205.
    7. Koetter, Michael & Noth, Felix, 2022. "European real estate markets during the pandemic: Is COVID-19 also a case for house price concerns?," IWH Policy Notes 3/2022, Halle Institute for Economic Research (IWH).
    8. Johnson, Kelsey K. & Parton, Lee & Nolte, Christoph & Williamson, Matt & Nogeire-McRae, Theresa & Paudel, Jayash & Brandt, Jodi, 2023. "Moving to the country: Understanding the effects of Covid-19 on property values and farmland development risk," Journal of Housing Economics, Elsevier, vol. 62(C).
    9. Justin Contat & Malcolm Rogers, 2022. "Housing Supply and Liquidity in the COVID-19 Era," FHFA Staff Working Papers 22-02, Federal Housing Finance Agency.
    10. Huang, Xirong & Geng, Chen & Li, Xiuting & Dong, Jichang, 2024. "Multiple factor flows and heterogeneous premium of urban house prices: Empirical evidence from Chinese cities," Finance Research Letters, Elsevier, vol. 69(PB).
    11. Adams, Brian & Verbrugge, Randal, 2025. "Location, location, structure type: Rent divergence within neighborhoods," Journal of Housing Economics, Elsevier, vol. 69(C).
    12. Bossman, Ahmed & Umar, Zaghum & Teplova, Tamara, 2022. "Modelling the asymmetric effect of COVID-19 on REIT returns: A quantile-on-quantile regression analysis," The Journal of Economic Asymmetries, Elsevier, vol. 26(C).
    13. Anundsen, André Kallåk & Kivedal, Bjørnar Karlsen & Røed Larsen, Erling & Thorsrud, Leif Anders, 2023. "Behavioral changes in the housing market before and after the Covid-19 lockdown," Journal of Housing Economics, Elsevier, vol. 59(PB).

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