Housing-market bubble adjustment in coastal communities - A spatial and temporal analysis of housing prices in Midwest Pinellas County, Florida

摘要

This study aims to investigate the spatial and temporal dynamics of housing prices associated with the 2007 U.S. housing-market bubble in Midwest Pinellas County, Florida. Two methods were used to examine the spatial and temporal dynamic of price levels: housing characteristic influence estimation and a hedonic modeling approach. Two consistent spatial patterns emerged in the estimated coefficients associated with various housing characteristics, with definitive changes occurring at 600 m and 2200 m from the coast. These changes suggested the existence of three geographical submarkets: a coastal, an intermediate or transitional, and an inland submarket. Three temporal stages were observed from the coefficient trends associated with various housing characteristics: 2002-2005 (bubble-growing), 2006 2008 (bubble-burst), and 2009-2011 (post-bubble). The hedonic models demonstrated a complexity in the determinant of housing prices during the housing peak-bubble period. The inclusion of submarket dummy variables in the hedonic models improved the amount of explained variation. The R-2 values of the hedonic models from 2002 through 2008, followed by a decrease after the bubble-burst period. The pre-bubble-burst trend in R-2 suggests that predictable market forces were at work; partly driven by irrational expectations of housing buyers and the perceptions of run-away housing prices during the growth phase of the bubble. (c) 2017 Elsevier Ltd. All rights reserved.