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The House Price-Vacancy Curve

Author

Listed:
  • Oliver Lerbs
  • Markus Teske

Abstract

Individual selling prices and vacancy rates in the housing market render a close analogy to the „wage curve“, a popular concept in labor economics that describes how individual wages decrease with higher local unemployment.While housing search and matching models strongly suggest a stable inverse relationship, there is still a lack of convincing empirical research on the sensitivity of house prices to local vacancy variation. Based on almost 8,000 single-family home transactions and controlling for a broad range of property- and neighborhood-level characteristics in hedonic regressions, this paper confirms a robust negative link between individual home prices and residential vacancies. The economic size of the relationship is very similar across the three analyzed states: a doubling of the vacancy rate at the municipality level is associated with an 8-12% discount in selling prices, yielding evidence of a „house price-vacancy curve“.

Suggested Citation

  • Oliver Lerbs & Markus Teske, 2016. "The House Price-Vacancy Curve," ERES eres2016_189, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2016_189
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. No Vacancy? Why Housing Prices in New York City are So High
      by Jason Barr in Skynomics Blog on 2020-01-14 13:41:46

    Citations

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    Cited by:

    1. Sören Gröbel, 2018. "Regional heterogeneity in age-related housing depreciation rates [Regionale Heterogenität altersbedingter Wertminderungen von Wohnimmobilien]," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 38(2), pages 219-254, October.
    2. Benedictow, Andreas & Larsen, Erling Røed & Sundelius, Dag Martin, 2025. "Estimating a housing Phillips curve: Evidence from Norway," Journal of Housing Economics, Elsevier, vol. 70(C).
    3. Oliver Lerbs & Jonas Neubacher & Markus Teske, 2017. "Wohnungsleerstand in Ostdeutschland: Begünstigende Faktoren, kleinräumige Trends und Auswirkungen auf Marktwerte," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 24(02), pages 12-20, April.

    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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