Reassessing the magnitude of housing price declines and the use of leverage in the Depressions of the 1890s and 1930s

Rose, Jonathan

doi:10.1111/1540-6229.12350

Cited by 4 publications

(4 citation statements)

References 55 publications

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“…Significantly, that evidence is consistent with results reported for Baltimore by Rose (2021) and evidence reported in the Financial Survey of 52 U.S. cities in 1934. In Baltimore, in 1930, some affluent borrowers preferred short-term mortgages to the longer-term, amortized versions offered mostly by savings and loans.…”

supporting

confidence: 91%

“…After 1929, values fell a lot, but the conventional wisdom is that first mortgages rarely exceeded 50 percent. However, a recent study of Baltimore indicates that many borrowers also held junior mortgages and faced high loan-to-value ratios (Rose 2022). Indeed, one in three were underwater by 1932.…”

Section: Resultsmentioning

confidence: 99%

“…Firestone (1951: 101–02) debates how far house prices fell between 1929 and 1933, suggesting 21 percent but adding that “one study” estimated 37 percent. A similar range of estimates applies to the United States, although Rose has suggested that these may be underestimates (Fishback and Kollman 2014: 229; Gjerstad and Smith 2014: 96; Rose 2022). Not surprisingly, rents followed, ranging between a decline of 24 percent (1930–34) in Canada and 31 percent (1929–33) in its southern neighbor (Greenway 1942: 508; Gjerstad and Smith 2014: 97).…”

Section: The Canadian Scene Comparedmentioning

confidence: 92%

“…To that end, case studies are indispensable. As Rose (2021, 2022) has pointed out in his study of Depression-era Baltimore, much relevant evidence, notably land registry and property assessment records, are usually only available locally. More importantly, especially in the 1930s, housing markets were local, more so than for any other consumer good.…”

mentioning

confidence: 99%

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A Local Housing Market in the Great Depression

Harris

2023

Soc. sci. hist.

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Housing figures prominently during economic crises, a notable example being the Great Depression. Because housing is immobile, its market is very localized. In each city, the main agents are closely interconnected. Lenders depend on mortgaged homeowners and landlords to maintain payments; landlords rely on tenants; municipalities need all property owners to pay taxes. The Depression experiences of tenants, homeowners, and federal housing programs are well-appreciated; those of landlords and private lenders much less so. Considering the role of all agents, this case study of Hamilton, Ontario, focuses on owners and private lenders and asks who lost property, to whom, and how. Drawing on land registry and property tax records, city directories, and newspaper accounts, it documents the pattern and trajectory of defaults experienced by homeowners, landlords, and private lenders. Contemporaries and historians have used foreclosures as a measure of distress, but many borrowers defaulted voluntarily. The experience of Hamilton’s homeowners was similar to those in U.S. cities. Local landlords experienced higher rates of defaults than homeowners; private lenders foreclosed less often than lending institutions. Along with municipalities, both learned to be flexible in demanding payments. The high incidence of private mortgages, the stability of lending institutions, and the marginal role of the federal government were distinctively Canadian, but in general Hamilton’s experience is more broadly indicative.

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supporting

confidence: 91%

Section: Resultsmentioning

confidence: 99%

Section: The Canadian Scene Comparedmentioning

confidence: 92%

mentioning

confidence: 99%

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A Local Housing Market in the Great Depression

Harris

2023

Soc. sci. hist.

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Completing the Picture of the Depression Housing Crisis

Harris¹

2023

Enterp. Soc.

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The Depression housing crisis caused enormous distress, with social, economic and political implications. The roles and experiences of some major players are well established. Tenants were evicted. National statistics on foreclosures show that many property owners lost their homes. Lending institutions went under. Municipalities struggled when property tax receipts fell. The federal government stepped in, establishing new programs and agencies, with long-term consequences. Other parts of the story have been neglected. Many borrowers surrendered their properties voluntarily, rather than await foreclosure. As vacancies rose and rents fell, landlords, many owning only one or two properties and/or renting part of their own homes, struggled. Neglected sources show they defaulted at a higher rate than homeowners. Among lenders, private individuals held more mortgages than any type of institution. Relying on investment income, many had a hard time. Both landlords and private lenders made concessions to avoid having to evict or foreclose, mitigating the effects of the Depression on tenants and borrowers. Sources exist to document local variations in the role of landlords and private lenders. These can give us a fuller picture of the Depression, one that still has relevance today.

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Loans for the “Little Fellow”: Credit, Crisis, and Recovery in the Great Depression

Quincy

2024

American Economic Review

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This paper identifies how bank branching benefited local economies during the Great Depression. Using archival data and narrative evidence, I show how Bank of America’s branch network in 1930s California created an internal capital market that diversified away local liquidity shortfalls, allowing the bank to maintain 49 percent higher credit growth from 1929 to 1933 than competing banks. The bank’s presence mitigated cites’ property value contractions and strengthened their recovery through 1940. Linked individual data show that the bank’s proximity to workers hastened the transition from agricultural employment to human-capital–intensive sectors in the 1930s, generating structural change and higher wages. (JEL E32, G01, G21, N12, N22, N92, R23)

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Reassessing the magnitude of housing price declines and the use of leverage in the Depressions of the 1890s and 1930s

Cited by 4 publications

References 55 publications

A Local Housing Market in the Great Depression

A Local Housing Market in the Great Depression

Completing the Picture of the Depression Housing Crisis

Loans for the “Little Fellow”: Credit, Crisis, and Recovery in the Great Depression

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