The impact of COVID-19 on home value in major Texas cities

Abstract

Purpose

This study aims to analyze the impact of COVID-19 on housing price within four major metropolitan areas in Texas: Austin, Dallas, Houston and San Antonio. The analysis intends to understand economic and mobility drivers behind the housing market under the inclusion of fixed and random effects.

Design/methodology/approach

This study used a linear mixed effects model to assess the socioeconomic and housing and transport-related factors contributing to median home prices in four major cities in Texas and to capture unobserved factors operating at spatial and temporal level during the COVID-19 pandemic.

Findings

The regression results indicated that an increase in new COVID-19 cases resulted in an increase in housing price. Additionally, housing price had a significant and negative relationship with the following variables: business cycle index, mortgage rate, percent of single-family homes, population density and foot traffic. Interestingly, unemployment claims did not have a significant impact on housing price, contrary to previous COVID-19 housing market related literature.

Originality/value

Previous literature analyzed the housing market within the first phase of COVID-19, whereas this study analyzed the effects of the COVID-19 throughout the entirety of 2020. The mixed model includes spatial and temporal analyses as well as provides insight into how quantitative-based mobility behavior impacted housing price, rather than relying on qualitative indicators such as shutdown order implementation.

Citation

Bhat, M.R., Jiao, J. and Azimian, A. (2023), "The impact of COVID-19 on home value in major Texas cities", International Journal of Housing Markets and Analysis, Vol. 16 No. 3, pp. 616-627. https://doi.org/10.1108/IJHMA-05-2021-0058