Housing market price movements under tech industry expansion during COVID-19
International Journal of Housing Markets and Analysis
ISSN: 1753-8270
Article publication date: 26 April 2022
Issue publication date: 21 March 2023
Abstract
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.
Keywords
Acknowledgements
This work was supported by University of Texas good system grand challenge and USDOT CM2 University Transportation Center at University of Texas Austin.
Declarations of interest: No potential conflict of interest was reported by the authors.
Citation
Jiao, J., Bhat, M.R., Azimian, A., Mandalapu, A. and Farahi, A. (2023), "Housing market price movements under tech industry expansion during COVID-19", International Journal of Housing Markets and Analysis, Vol. 16 No. 3, pp. 628-641. https://doi.org/10.1108/IJHMA-02-2022-0022
Publisher
:Emerald Publishing Limited
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