Cash to Spend: IPO Wealth and House Prices

Hartman‐Glaser, Barney; Thibodeau, Mark; Yoshida, Jiro

doi:10.2139/ssrn.3329651

Cited by 6 publications

(11 citation statements)

References 12 publications

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“…For Virginia, we use a 5-mile radius because car commuting is common due to limited access to public transit. Other studies also find that a 5-mile radius is a reasonable boundary for U.S. cities where car commuting is standard (e.g., Hartman-Glaser et al, 2020;Hu et al, 2021). 9 In New York, walkability and public transportation are defining factors, whereas driving is not a major mode of transportation.…”

Section: Empirical Strategymentioning

confidence: 98%

Amazon is coming to town: Sequential information revelation in the housing market

Chen,

Wilkoff,

Yoshida

2023

Real Estate Economics

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This study demonstrates that the housing market can incorporate information quickly instead of slowly over time, using Amazon's gradual revelation of its new headquarters locations in Virginia and New York. Spatial difference‐in‐differences analysis shows that housing prices near the Virginia headquarters exhibit 4.9% premia months before the decision, while price premia for New York reach 17.5% before the decision but disappear upon cancellation. The absence of significant effects on transaction volume, construction, or price premia for other finalist cities rules out the possibility of speculation. Overall, this study provides a counterpoint to the commonly held belief that the real estate market is always slow to respond to information about future demand shocks.

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Section: Empirical Strategymentioning

confidence: 98%

Amazon is coming to town: Sequential information revelation in the housing market

Chen,

Wilkoff,

Yoshida

2023

Real Estate Economics

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“…Increased demand for local services as well as new construction in the area surrounding the new corporate office may contribute to economic growth. Moreover, positive effects on capital markets have been observed when companies expanded and appreciated in their new geographic location (Abraham and Hendershott, 1994; Allen et al , 1997; Caporale et al , 2004; Capozza and Seguin, 1996; Fu and Ng, 2001; Hartman-Glaser et al , 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

“…However, there is a gap between COVID-19 analyses and economic and housing effects of technology corporation relocations. It is vital to analyze the combined effect of the COVID-19 pandemic and the relocation of high technology companies as features of the pandemic such as remote work may alter the validity of traditional preferences of living close to the company headquarters (Hartman-Glaser et al , 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Companies usually hire additional employees from the local area and the construction process of building the new headquarter will also produce a high demand within construction and other urban development industries. Further, workers relocating Housing market price movements from a previous headquarters or office will need housing with locally hired workers possibly moving to be closer to their work location (Hartman-Glaser et al, 2018). Therefore, company relocations may also have implications on local labor demand, urban infrastructure and housing markets.…”

Section: Introductionmentioning

confidence: 99%

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Housing market price movements under tech industry expansion during COVID-19

Jiao

Bhat

Azimian

et al. 2022

IJHMA

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Purpose This study aims to analyze the impact of technology-based corporation relocation on housing price indices during COVID-19 within the metropolitan areas of Austin, Texas and Seattle/Bellevue, Washington.The corporations under observation were Tesla and Amazon, respectively. The analysis intends to understand economic drivers behind the housing market and the radius of its effect while including fixed and random effects. Design/methodology/approach This study used a difference-in-difference (DID) method to evaluate changes in housing price index near and further away from Tesla’s and Amazon’s new corporate locations. The DID method allows for the capture of unique regional characteristics, as it requires a treatment and control group: housing price index and 5-mile and 10-mile search radii centered from the new corporate location. Findings The results indicated that corporate relocation announcements had a positive effect on housing price index post-pandemic. Specifically, the effect of Tesla’s relocation in Austin on the housing price index was not concentrated near the relocation site, but beyond the 5- and 10-mile radii. For Seattle/Bellevue, the effect of Amazon’s relocation announcement on housing price index was concentrated near the relocation site as well as beyond a 10-mile radius. Interestingly, these findings suggest housing markets incorporate speculation of prospective economic expansion linked with a corporate relocation. Originality/value Previous literature assessed COVID-19 housing market conditions and the economic effects of corporate relocation separately, whereas this study analyzed the housing price effects of corporate relocation during COVID-19. The DID method includes spatial and temporal analyses that allow for the impact of housing price to be observed across specified radii rather than a city-wide impact analysis.

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“…A study of university campuses in Nanjing, China, found that they were capitalized into housing prices within 0.5 kilometer, with greater impact for Tier 1 universities (Zhong et al, 2018). In a 10-mile radius from its headquarters, a company's initial public offering, measured from its run-up to its aftermath, increased housing prices by almost 2% (Hartman-Glaser et al, 2018). A study looking explicitly at the employment characteristics of home buyers in San Francisco linked buyers to business profiles on LinkedIn and Crunchbase; it identified 55% of buyers and showed that 51% of them worked in software (Madrigal, 2019).…”

Section: Tech and Housing Marketsmentioning

confidence: 99%

Big Tech on the Block: Examining the Impact of Tech Campuses on Local Housing Markets in the San Francisco Bay Area

Chapple

Jeon

2021

Economic Development Quarterly

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The rapid growth of tech company headquarters such as Apple, Facebook, and Google could potentially put new pressure on the housing market in adjacent residential neighborhoods, in the form of housing price appreciation and real estate speculation. This article examines the relationship between the big tech corporate campuses and Silicon Valley/San Francisco housing markets using the Zillow (ZTRAX) transaction and tax assessor data. The authors compare real estate activity adjacent to new company locations with activity in nearby areas, conducting a difference-in-differences analysis to estimate changes in housing prices and speculation. They find that housing prices increase overall by an additional 7.1% in the immediate vicinity of the tech campus 2 years after arrival, with wide variation across campuses. The authors also identify significant real estate speculation occurring prior to firms’ arrival. This suggests that cities should take a proactive role in mitigating tech firm impacts on vulnerable adjacent neighborhoods.

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Cash to Spend: IPO Wealth and House Prices

Cited by 6 publications

References 12 publications

Amazon is coming to town: Sequential information revelation in the housing market

Amazon is coming to town: Sequential information revelation in the housing market

Housing market price movements under tech industry expansion during COVID-19

Big Tech on the Block: Examining the Impact of Tech Campuses on Local Housing Markets in the San Francisco Bay Area

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