Understanding Spatial House Price Dynamics in a Housing Boom

Leo Kaas, Georgi Kocharkov and Nicolas Syrichas

No 65, Berlin School of Economics Discussion Papers from Berlin School of Economics

Abstract: We examine the evolution of spatial house price dispersion during Germany’s recent housing boom. Using a dataset of sales listings, we find that house price dispersion has significantly increased, which is driven entirely by rising price variation across postal codes. We show that both price divergence across labor market regions and widening spatial price variation within these regions are important factors for this trend. We propose and calibrate a directed search model of the housing market to understand the driving forces of rising spatial price dispersion, highlighting the role of housing supply, housing demand and frictions in the matching process between buyers and sellers. While shifts in housing supply, housing demand and search frictions all matter for overall price increases and for regional price differences, we find that variation in housing demand is the primary factor contributing to the widening spatial dispersion. Our model-based demand and supply components correlate strongly with regional fundamentals, suggesting that they capture economically meaningful variation in local housing markets.

Keywords: House price dispersion; Spatial housing markets; Search frictions in housing markets (search for similar items in EconPapers)
JEL-codes: D83 R21 R31 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2025-04-29
References: Add references at CitEc
Citations:

Downloads: (external link)
https://opus4.kobv.de/opus4-hsog/files/5822/BSoE_DP_0065.pdf (application/pdf)

Related works:
Working Paper: Understanding Spatial House Price Dynamics in a Housing Boom (2024)
Working Paper: Understanding Spatial House Price Dynamics in a Housing Boom (2024)
Working Paper: Understanding spatial house price dynamics in a housing boom (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bdp:dpaper:0065

DOI: 10.48462/opus4-5822

Access Statistics for this paper

More papers in Berlin School of Economics Discussion Papers from Berlin School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Reiter ().