Long-Term Appreciation of Owner-Occupied Single-Family House Prices in Milwaukee Neighborhoods

Abstract

Annual price indices of owner-occupied single-family houses are estimated for 111 neighborhoods in Milwaukee, Wisconsin, for the period of 1971-1993 using hedonic price methods controlling for quality differences across housing units. The rates of price appreciation vary significantly from neighborhood to neighborhood. During the 22-year study period, nominal house prices in some neighborhoods increased more than 500%, whereas those in others decreased. In general, the neighborhoods close to each other exhibit similar price movements. In some cases, however, there are sharp differences between the neighborhoods when strong boundaries, such as a river or an expressway, exist between them even though the physical distance between them is small. Poor neighborhoods generally have experienced low appreciation rates, although the racial composition and the crime rate in the neighborhood seem to contribute the differential as well.

Keywords:

• housing
• neighborhood
• long-term price appreciation