Changing capitalization of CBD-oriented transportation systems: evidence from Philadelphia, 1970-1988

Article Abstract:

The effect of accessibility to the central business district (CBD) on the price of housing is examined in the Philadelphiametropolitan area. Data on suburban house sales over the period 1970-1988 are analyzed. Highway access and access by rail, as provided by the Southeastern Pennsylvania Transportation Authority, are specifically considered. The resultssupport the capitalization of CBD accessibility into suburban house values. In addition, there is evidence that this relationship varies with the city's economic health, indicating that the CBD economy is an important determinant ofsuburban wealth. These results suggest that suburban welfare cannot be isolatedfrom central city growth or decline. Future research should focus on confirmingthis hypothesis when only a fraction of the suburban population works in the central city.

Transportation, Urban transportation, Central business districts

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Local market and national components in house price appreciation

Article Abstract:

House price appreciation was studied based on data during 1971-1989 covering 56 metropolitan statistical areas (MSAs). Variances for housing rates occured locally. Although the national economy showed its effect on the local market, no specific effects were noted for individual MSAs in the period covered. This means housing investors expected the same returns in different areas. Equal appreciation rates across MSAs, which reflect equal expected appreciation, goes against observed price level differences. For equilibrium in the housing market to hold, the relationship between equal rates and different price levels must be balanced by income increases across specific MSAs.

REAL ESTATE, Real estate industry, Prices, Dwellings, House buying, Home buying

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Housing price functions and ownership capitalization rates

Article Abstract:

A hedonic pricing model for housing is presented. The model generates hedonic prices that are not affected by selection bias, as well as capitalization rates that differ according to residents' age and family income. The model demonstrates that selection bias exists in price functions that use only samples of owner-occupied units or rental units. The mean annual capitalization rate for owner-occupied housing is about 10%, but the rate is non-monotonically associated with both the age of the head of the household and the income of the family.

Models, Valuation, Home ownership

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