The Impact of the COVID-19 Pandemic on the Demand for Density: Evidence from the U.S. Housing Market

Sitian Liu and Yichen Su

No 2024, Working Papers from Federal Reserve Bank of Dallas

Abstract: Cities are shaped by the strength of agglomeration and dispersion forces. We show that the COVID-19 pandemic has re-introduced disease transmission as a dispersion force in modern cities. We use detailed housing data to study the impact of the COVID-19 pandemic on the location demand for housing. We find that the pandemic has led to a reduced demand for housing in neighborhoods with high population density. The reduced demand for density is driven partially by the diminished need of living close to jobs that are telework-compatible and the declining value of access to consumption amenities. Neighborhoods with high pre-COVID-19 home prices also see a greater drop in housing demand. While the national housing market recovered after June, we show that the pandemic's negative effect on the demand for density persisted and strengthened, indicating that the change in the demand for density has lasted beyond an aggregate recovery of housing demand.

Keywords: COVID-19; Pandemic; Density; City; Neighborhood; Housing; Location; Telework; Amenity (search for similar items in EconPapers)
JEL-codes: I1 R2 R3 (search for similar items in EconPapers)
Pages: 47
Date: 2020-08-14, Revised 2020-10-23
New Economics Papers: this item is included in nep-hea and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: The impact of the COVID-19 pandemic on the demand for density: Evidence from the U.S. housing market (2021)
Working Paper: The Impact of the COVID-19 Pandemic on the Demand for Density: Evidence from the U.S. Housing Market (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddwp:88597

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DOI: 10.24149/wp2024r1

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