Values of environmental landscape amenities during the 2000–2006 real estate boom and subsequent 2008 recession

Abstract

This research suggests that consumers' marginal willingness to pay for environmental landscape attributes, such as water view, developed open space and forest-land open space, decreased during the 2008 recession compared to the 2000-2006 real estate boom. Estimates were obtained from a spatial hedonic housing price model after controlling for household location patterns and structural differences between the periods. Because the decline in amenity values was probably due to a temporary deterioration in economic conditions, the amenity values will probably rebound with economic recovery. Thus, development decisions based on the lower estimated amenity values measured during a temporary deterioration in economic conditions may be determined suboptimal post-economic recovery.

Housing Market Fluctuations and the Implicit Price of Water Quality: Empirical Evidence from a South Florida Housing Market

“…Our finding indicates that the improvement in water quality is valued by waterfront property owners and the amenity effect does not vanish even during the worst periods of the housing market. Unlike the earlier findings that recessions crowd out concern for the environmental quality (Cho et al 2011;Kahn and Kotchen 2010), our results appear to suggest that water quality remains as a high priority even in the worst of a housing market downturn. Recent work by finds a similar result for housing values along the Chesapeake Bay during the time period of 1996-2008.…”

“…This is a non-trivial result for any associated hedonic property valuation during the recent period of U.S. housing market malaise. Cho et al (2011) find evidence of this environmental crowding-out effect in their analysis of a water view, as well as developed and forest-land open space in the Nashville, Tennessee metropolitan area.…”

“…Thus, understanding how the derived implicit prices for an environmental amenity such as water quality vary, or do not vary, over time due to housing market fluctuations is essential to any analysis that utilizes such information (Boyle et al 2012;Cho et al 2011). Moreover, there is evidence that recessions crowd out concern for the environment (Kahn and Kotchen 2010), and therefore potentially result in lower environmental amenity implicit prices in absolute or percentage terms during a period of contraction (Boyle et al 2012).…”

“…Between 2000 and 2006, many parts of the U.S. experienced a housing boom with some metropolitan areas having nearly 40 % of their existing housing stock being built during this time period (Gabe and Florida 2013), and average U.S. housing prices rising by more than 54 % (Cho et al 2011). However, in 2007 the real estate boom turned to bust driven by the sub-prime mortgage crisis and ultimately an economic recession beginning in December 2007, with housing values falling between 25 and 50 % in 25 of the top 100 largest U.S. metropolitan areas (Gabe and Florida 2013).…”

An Empirical Analysis of Hunting Lease Pricing and Value of Game in Sweden

“…private ownership) expressed in discrete form (dummy variables), their implicit prices are computed as (Cho et al, 2010, Hussain et al, 2010, McMillan et al, 1980, Stewart, 2005:…”