Flattening the Curve and the Flight of the Rich: Pandemic-Induced Shifts in US and European Housing Markets

By Nina Biljanovska, Giovanni Dell'Ariccia

December 22, 2023

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Format: Chicago

Nina Biljanovska, and Giovanni Dell'Ariccia. Flattening the Curve and the Flight of the Rich: Pandemic-Induced Shifts in US and European Housing Markets, (USA: International Monetary Fund, 2023) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The pattern of increasing suburban house prices relative to urban centers initiated during the pandemic continues to hold across the top 30 US metropolitan statistical areas (MSAs). In contrast, European countries such as Denmark, France, and the United Kingdom did not experience a similar shift in valuations. We posit and find supporting evidence that these divergent patterns partially due to differences in the characteristics of suburban areas, particularly in terms of household income and property sizes; with European suburbs being relatively poorer and characterized by smaller housing units. We show that, in the US, MSAs with suburban features more akin to those in European cities generally experienced little to no increase in suburban housing prices compared to their urban centers. Finally, our findings indicate that migration patterns of the high-income population might have partially influenced the urban-suburban revaluation in the US.

Subject: Housing prices, Income, Inflation, National accounts, Population and demographics, Prices, Real estate prices

Keywords: City structure, Europe, High-income population mobility, House price gradient, Housing prices, Housing unit, Income, Income gap, Inflation, Population mobility, Price gradient, Property prices, Real estate prices

Publication Details

Pages:

47
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2023/266
Stock No:

WPIEA2023266
ISBN:

9798400262449
ISSN:

1018-5941

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