Micro-level return and volatility drivers in Boston's single family home market

Developers and investors commonly target neighborhoods close to the urban core and with low median incomes as potential growth markets. Investments in these areas however are often perceived by private sector capital as being high risk and low return. An understanding of the predictors of investment volatility and return is critical to investors and homeowners who wish to maximize investment returns and portfolio growth. Moreover, for mortgage lenders who are obligated to invest in a wide spectrum of communities, volatilities in house prices may affect the distribution of their collateral values, the probability of default, and the profitability of lending in certain areas. This paper addresses the following questions: Does appreciation return and volatility in metropolitan house prices vary significantly among zip code areas? Can the variation in appreciation return and volatility among these areas be explained by additional data? This paper uses appreciation and volatility statistics calculated from a repeat sale index of house prices in metropolitan Boston compiled biannually by Case Schiller Weiss (CSW) as well as data gathered from the 2000 U.S. Census and the 1997 Economic Census.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Urban Studies and Planning.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2003

Author dc:creator

• Valenta, Jay, 1969-

Advisor dc:contributor.advisor

• Henry O. Pollakowski.

• Urban Studies and Planning.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/29771

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/29771