Our website will undergo scheduled maintenance on the afternoon of Thursday, August 11, 2022. During this time, connection to our website and some of its features may be unavailable. Thank you for your patience and we apologize for any inconvenience.

Report

Superstar Returns


Abstract: We study long-term returns on residential real estate in twenty-seven “superstar” cities in fifteen countries over 150 years. We find that total returns in superstar cities are close to 100 basis points lower per year than in the rest of the country. House prices tend to grow faster in the superstars, but rent returns are substantially greater outside the big agglomerations, resulting in higher long-run total returns. The excess returns outside the superstars can be rationalized as a compensation for risk, especially for higher co-variance with income growth and lower liquidity. Superstar real estate is comparatively safe.

Keywords: housing returns; housing risk; superstar cities; regional housing markets;

JEL Classification: G10; G12; N90; R21; R31;

Access Documents

File(s): File format is application/pdf https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr999.pdf
Description: Full text

File(s): File format is text/html https://www.newyorkfed.org/research/staff_reports/sr999.html
Description: Summary

Authors

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Staff Reports

Publication Date: 2021-12-01

Number: 999