Graduation Year

2021

Date of Submission

5-2021

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Professor Angela Vossmeyer, Ph.D

Rights Information

2021 Harrison V Brenner

Abstract

How has the pandemic impacted single family home values? While prior recessions developed from a gradual increase in economic distress, the COVID-19 pandemic caused a sudden shock to the economy, especially in the labor markets. More importantly, while this pandemic has resulted in what might be one of the shortest recessions in history, remote work and changes in housing preferences are just some of the effects that are believed to be long lasting. Rising demands for single family homes coupled with low supply elasticity has led to a continued increase in prices. This paper uses county level fixed effects in Florida, California, Texas, Arizona, and Colorado to identify the effect of unemployment rate, employment by industry sector, and COVID cases on median home values. Low variation within industry employment clusters in the fixed effect model has mainly led inconclusive results, especially in regard to urban vs non-urban areas. However, after grouping counties based on 2019-2020 growth rates, my results are consistent with that of existing literature in that previous trends in the housing market were not drastically affected by pandemic induced COVID cases or unemployment. Furthermore, my results show that areas that are considered less affordable actually saw a negative impact from the pandemic while more affordable places were less affected from unemployment or total case variations. My analysis further supports the idea of resiliency within the housing market during labor economic shocks, as opposed to financial crisis.

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This thesis is restricted to the Claremont Colleges current faculty, students, and staff.

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