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The Pricing Effects of Open Space Amenities

Author

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  • Qin Fan
  • J. Hansz
  • Xiaoming Yang

Abstract

A spatial Durbin model (SDM) is developed to estimate the open space proximity values in Fresno-Clovis metropolitan area in Central California circa 2005 to 2012, a time period covering a full market cycle with distinctive boom, bust, and recovery market phases. By controlling for distressed market conditions (vacant, foreclosure, and short-sale transactions) and spillover pricing effects, we find significant but heterogeneous values for proximity to five types of open space amenities. Furthermore, proximity values for parks and golf courses are found to drop by more than 20 % in the bust period relative to the boom period. Results show that failing to capture distressed market conditions and market phases, when the housing market is out of equilibrium, leads to biased results. In addition, our findings suggest that ignoring spatial dependence and spillover pricing effects presents a potential bias in estimating open space amenity values. The SDM, which considers spatial dependence and spillovers at a finer scale in the neighborhood, outperforms region fixed effects models when spatial spillovers are significant. Copyright Springer Science+Business Media New York 2016

Suggested Citation

  • Qin Fan & J. Hansz & Xiaoming Yang, 2016. "The Pricing Effects of Open Space Amenities," The Journal of Real Estate Finance and Economics, Springer, vol. 52(3), pages 244-271, April.
    • Handle: RePEc:kap:jrefec:v:52:y:2016:i:3:p:244-271
    DOI: 10.1007/s11146-015-9508-1
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    Citations

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    Cited by:

    1. Meri Davlasheridze & Qin Fan, 2019. "Valuing Seawall Protection in the Wake of Hurricane Ike," Economics of Disasters and Climate Change, Springer, vol. 3(3), pages 257-279, October.
    2. Du, Xuejun & Huang, Zhonghua, 2018. "Spatial and temporal effects of urban wetlands on housing prices: Evidence from Hangzhou, China," Land Use Policy, Elsevier, vol. 73(C), pages 290-298.
    3. Hajnal István, 2019. "Market value of the view restriction," Organization, Technology and Management in Construction, Sciendo, vol. 11(1), pages 1925-1932, February.
    4. Andres Jauregui & Qin Fan & Jacquelin Curry, 2023. "House Price Capitalization of Stormwater Retention Basins: Evidence from Fresno-Clovis Metropolitan Area in California," The Journal of Real Estate Finance and Economics, Springer, vol. 67(4), pages 606-626, November.
    5. Fernandez, Mario Andres & Bucaram, Santiago, 2019. "The changing face of environmental amenities: Heterogeneity across housing submarkets and time," Land Use Policy, Elsevier, vol. 83(C), pages 449-460.
    6. Liu, Lu & Meng, Lina & Zhang, Ruige, 2024. "Does Easy Accessibility to Urban Parks Always Raise Home Values?," Journal of Housing Economics, Elsevier, vol. 63(C).

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