An Examination of Systematic Differences in the Appreciation of Individual Housing Units

Abstract

House price appreciation should play an important role in households' decisions of when, where, and how "much" house to buy, and whether to default on their mortgages. Several price indexes are published which could be used as a measure of appreciation, but their focus on aggregate price changes does not facilitate their inclusion in micro-level studies of housing decisions. This paper examines individual housing unit appreciation using owners' valuations. This measure is accurate and is available in several commonly used data sets. Systematic differences in these rates are found between cities, within cities, between different types of units, and between individual owners.