U.S. metropolitan house price dynamics

Elias Oikarinen, Steven C. Bourassa, Martin Hoesli, Janne Engblom

Research output: Contribution to journalArticlepeer-review

27 Citations (Scopus)
6 Downloads (Pure)


Using data for 70 U.S. metropolitan areas, this study explores spatial heterogeneity in house price dynamics. We use recent advances in panel econometrics that allow for spatial heterogeneity, cross-sectional dependence, and non-stationary but cointegrated data. We test for spatial differences and analyze the relationship between the price elasticity of housing supply and the
income elasticity of prices, as well as bubble size and duration. The long-term elasticity of house prices with respect to aggregate personal income averages 0.81, but varies considerably across metropolitan areas. The long-term income elasticity generally is greater in the more supplyinelastic metropolitan areas, and we show that bubble size and duration are inversely related to supply elasticity. Also short-term momentum and reversion dynamics show substantial spatial
Original languageEnglish
Pages (from-to)54-69
Number of pages16
JournalJournal of Urban Economics
Early online date9 Mar 2018
Publication statusPublished - May 2018

Bibliographical note

For helpful comments, we thank Dan McMillen and other participants at the 2017 FSU-UF Critical Issues in Real Estate Symposium, two anonymous referees, and the editor. We thank Sam Khater for providing the CoreLogic house price indexes, Albert Saiz for giving supply elasticity data, and Andrew VanValin for preparing the maps.
Funding: This work was supported by the OP-Pohjola Group Research Foundation and the Academy of Finland (first author; grant number 268310)


  • house prices
  • dynamics
  • panel data
  • spatial heterogeneity
  • spatial dependence
  • bubbles


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