It’s been in the making for a while, but now everything is final: In January, I will move to Boston.
I will work on automatic domain appraisals and price design at Sedo.com (great data, great product, great company) and will be visiting at MIT’s Center for Real Estate. My research will be all about “virtual real estate” – needless to say that I am thrilled about this opportunity.
On Rushes and Riches: The “Wild West” Era for Internet Domain Names Is Over as Efficient Markets for This “Virtual Land” Have Emerged
On April 22nd, 1889, large areas of what is now Oklahoma were officially opened up for homestead settlement. At high noon, thousands of pioneers raced from the territory’s borders into pristine land, claiming lots on a first come, first serve basis. Within hours (!), first cities emerged around railroad stations or at other well connected spots, quickly establishing local governments, basic infrastructure and property rights. Despite opposing laws, land claims were directly sold off in secondary markets.
On June 14, I was invited to give a presentation of my working paper on local price dynamics within cities at the University of Amsterdam’s Real Estate Group. The seminar was a great trigger to work on the paper again and to implement some new ideas beforehand (check the latest PDF). But even more, I am very grateful to the feedback provided by Peter Englund, Marc Francke and all other participants of the seminar. I greatly benefited from their discussions, comments and suggestions – UvA, Thank you so much!
I would like to thank Maastricht University, my family, my friends and colleagues for making this day a wonderful final chord for my years in Maastricht.
I am very grateful to prof. Franz Palm, prof. John Quigley, and prof. Peter Schotman for serving on my evaluation committee and for their invaluable feedback. The esteemed members of the corona, prof. Yongheng Deng, prof. Antoon Pelsser, prof. Dennis Bams, prof. Stefan Straetmans, prof. Jaap Bos, and dr. Sanstad, are thanked for their time, friendliness and, above all, for their challenging questions.
Fears of gentrification are aired in the rapidly changing Berlin neighborhood
I have seen the “fuck yuppies”-tag on so many walls in Kreuzberg, Friedrichshain and even cozy Alt-Treptow.
This is a bit more elaborated statement on a board indicating the construction of new residential units on a piece of vacant land in Alt-Treptow. It says “Aufwertung = Verdrängung” which roughly means “neighborhood improvements drive out current residents”.
Probably the best way to keep your rent down is to throw your garbage on the street in front of your house. Or put some graffiti at your neighbors freshly painted walls, as the tag below explains: “Wertminderung” means “depreciation / loss of value”.
Boring economist might suggest to increase the home ownership rate to overcome the conflict between incumbents and new residents.
PS: I was so proud of this post’s title – and now I have to realize that others have used it before. Bummer.
My latest working paper researches within-city home price dynamics in bullish and bearish residential real estate markets. It contributes to the literature addressing the urban layout of cities by formulating and empirically testing a novel idea for changes in the price gradients across neighborhoods under different market regimes. It finds that the combination of city-wide falling home prices and declining population numbers hurts low-value neighborhoods most, while falling home-prices in cities with robust demographics do not lead to shifts in the within-city distribution of housing wealth. In addition, the paper confirms earlier findings on endogenous home price dynamics.
A new level of spatial detailedness is achieved by combining a high-quality data-set for The Netherlands with estimation techniques borrowed from the geoscience domain. The data comprise of 1.8 million single family home transactions and 0.8 million apartments sold by members of the Dutch Realtor Association (NVM). This is the first paper that estimates home price index surfaces for an entire country based on a spatial error model (SER).
Next year, Berkeley’s Ashok Bardok, Bob Edelstein and Cynthia Kroll will publish an around-the-world analysis of the current housing crisis. Together with Piet Eichholtz, I had the honor to contribute a chapter on the big outlier in European housing markets: Germany. More on this soon.
Based on a data set of single-family homes we estimate a standard hedonic price equation spanning the years 1978 through 2007. The graph above suggests that the Berlin housing market has experienced roughly three phases for the 30 years covered by the index. The first period, between 1978 and 1989, can be characterized by steady growth. The average house price increase over this time period was 1.9 percent (corrected for inflation).
The exuberance in the aftermath of the fall of the Wall fueled price increases, peaking in 1994 with nominal prices being 47 percent above 1989 values. The average annual price increase for this period was 8.1 percent in nominal terms, and 4.6 percent in real terms.
In 1995, house prices decreased slightly followed by a much larger drop in 1996. In 2007, house prices were back at 1989 levels – in nominal terms. In real terms, however, prices had plummeted to 55 percent of their 1994 values, and 84 percent of their 1978 values. Such an extended period of price losses is unprecedented among European capitals (see figure below).