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House price differentials and dynamics: evidence from the Los Angeles and San Francisco metropolitan areas

Author

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  • Stuart A. Gabriel
  • Joe P. Mattey
  • William L. Wascher

Abstract

This paper applies insights from economic theory to explain recent housing price patterns in California's two largest metropolitan areas. We pay particular attention to the role of migration between metropolitan areas in explaining overall housing price dynamics for a given metropolitan area, and we show how household mobility within a metropolitan area tends to attenuate price pressures in the most supply-constrained places. In reviewing various models' ability to explain California's house price patterns, we also provide some historical perspective on California's urban structure, population growth, and housing price trends.

Suggested Citation

  • Stuart A. Gabriel & Joe P. Mattey & William L. Wascher, 1999. "House price differentials and dynamics: evidence from the Los Angeles and San Francisco metropolitan areas," Economic Review, Federal Reserve Bank of San Francisco, pages 3-22.
  • Handle: RePEc:fip:fedfer:y:1999:p:3-22:n:1
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    File URL: http://www.frbsf.org/econrsrch/econrev/99-1/3-22.pdf
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    References listed on IDEAS

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    1. Meese Richard & Wallace Nancy, 1994. "Testing the Present Value Relation for Housing Prices: Should I Leave My House in San Francisco?," Journal of Urban Economics, Elsevier, vol. 35(3), pages 245-266, May.
    2. Stuart A. Gabriel & Joe P. Mattey & William L. Wascher, 1995. "The demise of California reconsidered: interstate migration over the economic cycle," Economic Review, Federal Reserve Bank of San Francisco, pages 30-48.
    3. Gabriel, Stuart A. & Mattey, Joe P. & Wascher, William L., 2003. "Compensating differentials and evolution in the quality-of-life among U.S. states," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 619-649, September.
    4. Stephen Malpezzi, 1994. "Housing Prices, Externalities, and Regulation in U.S. Metropolitan Areas," Wisconsin-Madison CULER working papers 94-08, University of Wisconsin Center for Urban Land Economic Research.
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    Cited by:

    1. John M. Quigley & Steven Raphael & Eugene Smolensky, 2001. "Homeless In America, Homeless In California," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 37-51, February.
    2. David E. Frame, 2008. "Regional Migration and House Price Appreciation," International Real Estate Review, Global Social Science Institute, vol. 11(1), pages 96-112.
    3. Rangan Gupta & Stephen Miller, 2012. "The Time-Series Properties of House Prices: A Case Study of the Southern California Market," The Journal of Real Estate Finance and Economics, Springer, vol. 44(3), pages 339-361, April.
    4. Karl Case & John Cotter & Stuart Gabriel, 2010. "Housing Risk and Return: Evidence From a Housing Asset-Pricing Model," Working Papers 201005, Geary Institute, University College Dublin.
    5. John Krainer, 1999. "Real estate liquidity," Economic Review, Federal Reserve Bank of San Francisco, pages 14-26.
    6. Norman Miller & Liang Peng & Michael Sklarz, 2011. "House Prices and Economic Growth," The Journal of Real Estate Finance and Economics, Springer, vol. 42(4), pages 522-541, May.

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