COVID-19 and housing market effects: Evidence from U.S. shutdown orders

Abstract

This paper provides novel evidence on pricing effects in housing markets following government shutdown responses to COVID-19 using microlevel data on U.S. residential property transactions. We find that post-shutdown pricing effects not only depend on population density but also the size and structural density of properties. The average price of a three-bedroom property fell by approximately 1.4% in densely populated locations (e.g., downtown) but increased by about 1.5% in low-density locations (e.g., suburbs) where shutdowns were enacted. The effects are more drastic for properties with fewer bedrooms. We also document a significant decrease in sales for markets under a shutdown.