Volume 15, Issues 2

2004

 

 

Fueled by the information technology industry, many regions saw rapid economic growth in the late 1990s, accompanied by upward pressure on housing prices. Yet housing price appreciation varies significantly within metropolitan area. This article uses the San Francisco Bay Area and the Twin Cities to examine the variation in appreciation in order to detrmine the role of intrametroplitan sectoral location patterns in shaping hot and cold local housing markets. It first develops livability indicators based on each city's commute-shed (a geographic region defined by the average travel time between homes and jobs). It then uses discriminant analysis to identify the key indicators that differentiate between rapidly appreicating and slower-growth areas.

 

Findings suggest the particular importance of information-intensive start-up firms in shaping price appreciation in the Bay Area; however, traditional amenities better explain appreciation in the Twin Cities.