Modelling Spatial Housing Markets, 2001 Theory, Analysis and Policy Advances in Urban and Regional Economics Series, Vol. 2

Spatial fixity is one of the characteristics that distinguishes housing from most other goods and services in the economy. In general, housing cannot be moved from one part of the country to another in response to shortages or excesses in particular areas. The modelling of housing markets and the interlinkages between markets at different spatial levels - international, national, regional and urban - are the main themes of this book.
A second major theme is disaggregation, not only in terms of space, but also between households. The book argues that aggregate time-series models of housing markets of the type widely used in Britain and also in other countries in the past have become less relevant in a world of increasing income dispersion. Typically, aggregate relationships will break down, except under special conditions. We can no longer assume that traditional location or tenure patterns, for example, will continue in the future.
The book has four main components. First, it discusses trends in housing markets both internationally and within nations. Second, the book develops theoretical housing models at each spatial scale, starting with national models, moving down to the regional level and, then, to urban models. Third, the book provides empirical estimates of the models and, finally, the models are used for policy analysis. Analysis ranges over a wide variety of topics, including explanations for differing international house price trends, the causes of housing cycles, the role of credit markets, regional housing market interactions and the role of housing in urban/suburban population drift.

1 1. Introduction.- 1.1 Introduction.- 1.2 The Scope of the Book.- 2 2. Issues in Housing Data Analysis.- 2.1 Introduction.- 2.2 Time-Series Properties of International House Prices, Construction and Transactions.- 2.3 The Sub-National (Regional) Level.- 2.4 Metropolitan House Prices.- 2.5 Measurement Errors and Biases.- 3 3. Selected Topics In Housing Theory: A National Perspective.- 3.1 Introduction.- 3.2 The Determination of House Prices.- 3.3 Credit Rationing and Downpayment Constraints.- 3.4 Lags in prices.- 3.5 Joint Models of House Prices and Property Transactions.- 3.6 Joint Models of Prices and Construction (Stock/Flow Models).- 3.7 General Equilibrium Models.- 3.8 Concluding Remarks.- 4 4. Housing Theory: Regional Issues.- 4.1 Introduction.- 4.2 Regional House Price Models.- 4.3 Econometric Issues.- 4.4 Convergence and Divergence in Regional Housing Markets.- 4.5 So Why Do Regional Price Patterns Differ?.- 5 5. Housing Careers and Urban Structure.- 5.1 Introduction.- 5.2 Some Aspects of Location Theory and Its Extensions.- 5.3 Unemployment in London.- 5.4 Urban/Suburban Drift.- 5.5 Individual Housing Careers.- 6 6. Empirical Findings from National Housing Models.- 6.1 Introduction.- 6.2 House Price Models.- 6.3 Stock-Flow Models of Prices and Construction.- 6.4 House Prices and Transactions.- 6.5 Full Models of Housing and the Economy.- 7 7. Explaining Regional Patterns.- 7.1 Introduction.- 7.2 What Does the Literature Say?.- 7.3 Convergence and Divergence.- 7.4 Spatial Coefficient Heterogeneity and the Ripple Effect.- 7.5 Debt Gearing and Regional Price Changes.- 7.6 Spatial Interactions in the USA and Australia.- 8 8. Housing, Deprivation and Urban Change.- 8.1 Introduction.- 8.2 Moving and Location in London and South East England.- 8.3 Unemployment —Location or Skills?.- 8.4 Housing and Industrial Location.- 8.5 Commuting Behaviour.- 8.6 Conclusions.- 9 9. Selected Issues in National Housing Policy.- 9.1 Introduction.- 9.2 Housing, Consumers’ Expenditure and Financial Liberalisation.- 9.3 Downpayments, Monetary Policy and Cycles.- 9.4 Housing and Monetary Union.- 9.5 Planning for Household Growth.- 10 10. Selected Issues in Regional and Urban Housing Policy.- 10.1 Introduction.- 10.2 Regional Evolutions.- 10.3 Relative Prices, Planning and Policy.- 10.4 Urban Population Dynamics.- 10.5 Urban Structure.- 10.6 Is Population Loss from Cities Inevitable?.- 10.7 Housing and Low-Income Households.- 10.8 Cumulative Growth and Decline — Some Conclusions.- 11 11. And Finally.- References.