Amazon HQ2: A Tale of Shocks to Housing Price Expectations

Matthew Famiglietti, Carlos Garriga () and Eugenio Miravete

No 18314, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The measurement of the contribution of expectations to house prices is unresolved in the macro-housing literature. We leverage a novel quasi-natural experiment using Amazon’s unanticipated split location decision for its second headquarters to identify the impact of this expectations shock on local house prices, seller expectations and market liquidity. We find that listed and transacted prices increased on average 7.9% and 7.5%, respectively in the six months following the announcement. Furthermore, price gains were common across all market segments and the announcement had no effect on rents. We develop a tractable general equilibrium macro-housing model featuring mortgages and endogenous housing supply able to replicate the response of the price-rent ratio to an expectations shock. The model quantifies the differences between credit and expectations shocks and generates testable predictions for identifying the nature of a housing price shock. Our empirical and theoretical results provide a benchmark test for structural models that attempt to incorporate shocks to price expectations.

JEL-codes: E23 E32 E44 G21 R31 (search for similar items in EconPapers)
Date: 2023-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP18314 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
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:cpr:ceprdp:18314

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP18314

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().