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The determinants of demand for single family housing in Alabama urbanized areas

John M. Kagochi (School of Business Administration, University of Houston‐Victoria, Victoria, Texas, USA)
Lesley M. Mace (Department of Economics, School of Business, Auburn University Montgomery, Montgomery, Alabama, USA)

International Journal of Housing Markets and Analysis

ISSN: 1753-8270

Article publication date: 29 May 2009

Abstract

Purpose

The purpose of this paper is to analyze factors that determine the demand for single family houses in Alabama urbanized areas, commonly referred to as metropolitan statistical areas (MSAs).

Design/methodology/approach

This paper builds and estimates a housing demand model that incorporates both macroeconomic and housing‐related variables using a panel time series data for 1988‐2007. The study is different from past research, which mainly focuses on housing demand at the state or national level, by looking at the factors influencing demand for housing at the MSAs level.

Findings

The study finds that demand for new single family houses in Alabama MSAs is influenced by both national economic factors and local factors. Population growth and increased sale of existing houses increase demand for new single family houses in the MSAs. On the contrary, increased cost of building a new house, higher real mortgage interest rates and unemployment rates are found to reduce the demand for new houses.

Originality/value

This study is one of the few studies that focus on housing demand at the local level, particularly in the US housing market. Since demand for housing will always be local and therefore influenced mostly by local conditions, the result reveal unique dynamics that are specific to the MSAs.

Keywords

Citation

Kagochi, J.M. and Mace, L.M. (2009), "The determinants of demand for single family housing in Alabama urbanized areas", International Journal of Housing Markets and Analysis, Vol. 2 No. 2, pp. 132-144. https://doi.org/10.1108/17538270910963072

Publisher

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Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited