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New Multi-City Estimates of the Changes in Home Values, 1920-1940

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  • Price V. Fishback
  • Trevor Kollmann

Abstract

The boom and bust in housing during the 2000s has led to renewed interest in the boom and bust in housing between 1920 and 1940. The most commonly used housing value series for this period is reported by Robert Shiller in Irrational Exuberance. We investigate the changes in housing values in cities between 1920 and 1940 using a variety of alternative sources with many more cities available for comparison than in the Shiller series. We find that all nominal housing value series show a strong decline between the late 1920s and the early 1930s. However, all of the series except the Shiller series imply that housing values in 1920 were well below the 1930 value and thus imply much stronger growth rates in housing values during the 1920s housing boom. Only the Shiller series predicts a strong recovery in housing values to within 5 percent of the 1930 level. All of the others suggest that nominal housing values in 1940 remained at least 18 percent below the 1930 values and several series suggest that values lurched downward between 1933 and 1940. The results suggest that a significant reconsideration of the operation of housing markets in the 1920s and 1930s is required.

Suggested Citation

  • Price V. Fishback & Trevor Kollmann, 2012. "New Multi-City Estimates of the Changes in Home Values, 1920-1940," NBER Working Papers 18272, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:18272
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    References listed on IDEAS

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    1. Michael Brocker & Christopher Hanes, 2014. "The 1920s American Real Estate Boom and the Downturn of the Great Depression: Evidence from City Cross-Sections," NBER Chapters, in: Housing and Mortgage Markets in Historical Perspective, pages 161-201, National Bureau of Economic Research, Inc.
    2. Ernest M. Fisher, 1951. "Urban Real Estate Markets: Characteristics and Financing," NBER Books, National Bureau of Economic Research, Inc, number fish51-1.
    3. David L. Wickens, 1941. "Residential Real Estate, Its Economic Position as Shown by Values, Rents, Family Incomes, Financing, and Construction, Together with Estimates for All Real Estate," NBER Books, National Bureau of Economic Research, Inc, number wick41-1.
    4. Leo Grebler & David M. Blank & Louis Winnick, 1956. "Capital Formation in Residential Real Estate: Trends and Prospects," NBER Books, National Bureau of Economic Research, Inc, number greb56-1.
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    Cited by:

    1. Price Fishback, 2017. "How Successful Was the New Deal? The Microeconomic Impact of New Deal Spending and Lending Policies in the 1930s," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1435-1485, December.
    2. Fishback, Price & Fleitas, Sebastian & Rose, Jonathan & Snowden, Ken, 2020. "Collateral Damage: The Impact of Foreclosures on New Home Mortgage Lending in the 1930s," The Journal of Economic History, Cambridge University Press, vol. 80(3), pages 853-885, September.
    3. Jonathan D. Rose, 2018. "Contract Choice in the Interwar US Residential Mortgage Market," Working Paper Series WP-2018-13, Federal Reserve Bank of Chicago.
    4. Rose, Jonathan, 2021. "Short-term residential mortgage contracts in American economic history," Explorations in Economic History, Elsevier, vol. 79(C).
    5. Quincy, Sarah, 2022. "Income shocks and housing spillovers: Evidence from the World War I Veterans’ Bonus," Journal of Urban Economics, Elsevier, vol. 132(C).
    6. Jonathan D. Rose, 2022. "Reassessing the magnitude of housing price declines and the use of leverage in the Depressions of the 1890s and 1930s," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(4), pages 907-930, December.
    7. Siodla, James, 2020. "Debt and taxes: Fiscal strain and US city budgets during the Great Depression," Explorations in Economic History, Elsevier, vol. 76(C).

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    More about this item

    JEL classification:

    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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