Anatomy of a Housing Crash—Case of Southern California
Track: Business GIS
Author(s): Johannes Moenius
Since interest rates do not vary much across the country, one might have expected that house prices across the United States should have roughly proportionally increased following the mortgage rate decline after 2000. However, this was not the case. Not only did house prices rise – and then fall – dramatically only in few states, changes also varied substantially by neighborhood: Geo-coding data of 350,000 sales of single family homes in Riverside and San Bernardino County from 1998 to 2008, I found that spending on single family homes adjusted for inflation had risen fourfold in some neighborhoods, while others 'only' doubled in the same time period. What drove these differences in house-price development?
While the 3D presentation of the housing bubble will probably appeal to anyone, local policy makers, financial risk analysts and real estate professionals may find the presentation especially helpful.
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