BIO

I am a sophomore majoring in economics with minors in business, mathematics and politics, philosophy, & economics. I am originally from Champaign, Illinois. After college, I plan on pursuing a graduate degree in economics and I would love to live in Vermont some day!

The Role of Vacancies and Crime in Determining Home Prices

Abstract

Understanding homeowner vacancy and crime rates is critical to analyzing a community's growth potential and health. Home sale prices are clear indicators of a neighborhood's perception of quality and are influenced by standard home specifications and the characteristics of the surrounding neighborhood. Building on an abundant literature on the role vacancies and crime play in a community’s housing market, we ask the following: What role, if any, do homeowner vacancies and crime rates play in predicting a home’s sale price while controlling for other factors? We develop a hedonic price model of sales price that, in addition to typical housing characteristics, includes home vacancies and crime (property and violent) as explanatory variables. We use 2022 tax roll data from the Leon County Property Appraiser, 2021 ACS Data, and 2022 crime data from the Tallahassee Police Department. We also explore whether the effect of vacancies in an area depends on property and violent crime rates by introducing an interaction term to our model. Preliminary results suggest that home prices, on average, are lower in areas where vacancies are higher. Specifically, we observe a statistically significant relationship between the number of vacancies in a given home’s area and the home’s sale price. We also find that the effect of homeowner vacancies on sale price may depend on the level of violent and property crime in an area, although the direction of the effect is different between the two types of crime.

Keywords: Home Prices, Vacancy, Crime