Flattening the Curve: Pandemic-Induced Revaluation of Urban Real Estate
We show that the COVID-19 pandemic brought house price and rent declines in city centers, and price and rent increases away from the center, thereby flattening the bid-rent curve in most U.S. metropolitan areas. Across MSAs, the flattening of the bid-rent curve is larger when working from home is more prevalent, housing markets are more regulated, and supply is less elastic. Housing markets predict that urban rent growth will exceed suburban rent growth for the foreseeable future.
The authors would like to thank Zillow, VenPath, Realtor, Pulsenomics, and Safegraph for providing data. The authors have no conflicts of interest to declare. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.