Project/blog link:Micro Markets BASIS Advisor: Chris Lamb Internship location: Northern Arizona University Onsite Mentor: Dr. Ding Du, Associate Professor
Who remembers the 2008 housing market crash? Everyone! And for good reason too. The U.S. real estate market is a vital part of the health of our national economy. And it affects us all. Today, real estate economics remains a relatively new field with much to be discovered. With my project, I hope to add to this quickly expanding area of research. One feature of the real estate market is the heterogeneity amongst products. All properties are unique. They can differ across a variety of characteristics: square footage, intended use, # of rooms, location, etc. Thus, each property also has a unique price. Recognizing this, I began to wonder: if each property is entirely unique, is it possible that specific property types can behave differently from the overall market or even have unique market cycles? To answer this question, I will be collecting data on house prices and characteristics from 12 randomly selected counties in California, New York, and Colorado. Price performance from 2000 to 2015 for 13 different property types will be compared. Using statistical analysis, I will determine if any differences between the property types are significant. I expect to find that a few, specific property types (i.e. waterfront mansions) will experience at least slightly different market cycles than the general market. These “micro markets” in real estate could significantly affect investing strategies in the field. This study will determine if they exist and weigh the impacts they could have.